HGINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 12.9%.

The Cost of Equity of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 18.15%.

The Cost of Debt of HG Infra Engineering Ltd (Part IX) (HGINFRA.NS) is 12.00%.

	Range	Selected
Cost of equity	16.20% - 20.10%	18.15%
Tax rate	25.80% - 25.90%	25.85%
Cost of debt	10.00% - 14.00%	12.00%
WACC	11.2% - 14.5%	12.9%

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	1.12	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.20%	20.10%

Tax rate	25.80%	25.90%
Debt/Equity ratio	1.33	1.33
Cost of debt	10.00%	14.00%

After-tax WACC	11.2%	14.5%


Selected WACC	12.9%

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 (18.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.12) + 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.