HGINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 14.2%.

The Cost of Equity of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 18.25%.

The Cost of Debt of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 11.30%.

	Range	Selected
Cost of equity	12.70% - 23.80%	18.25%
Tax rate	25.80% - 25.90%	25.85%
Cost of debt	8.60% - 14.00%	11.30%
WACC	10.1% - 18.3%	14.2%

WACC

HGINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.7	1.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.70%	23.80%

Tax rate	25.80%	25.90%
Debt/Equity ratio	0.68	0.68
Cost of debt	8.60%	14.00%

After-tax WACC	10.1%	18.3%


Selected WACC	14.2%

HGINFRA.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for HGINFRA.NS:

cost_of_equity (18.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.7) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.