INDORAMA.NS WACC - Weighted Average Cost of Capital

The WACC of Indo Rama Synthetics (India) Ltd (INDORAMA.NS) is 14.1%.

The Cost of Equity of Indo Rama Synthetics (India) Ltd (INDORAMA.NS) is 16.85%.

The Cost of Debt of Indo Rama Synthetics (India) Ltd (INDORAMA.NS) is 12.50%.

	Range	Selected
Cost of equity	14.40% - 19.30%	16.85%
Tax rate	0.40% - 9.40%	4.90%
Cost of debt	10.50% - 14.50%	12.50%
WACC	12.2% - 15.9%	14.1%

WACC

INDORAMA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	19.30%

Tax rate	0.40%	9.40%
Debt/Equity ratio	1.21	1.21
Cost of debt	10.50%	14.50%

After-tax WACC	12.2%	15.9%


Selected WACC	14.1%

INDORAMA.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 INDORAMA.NS:

cost_of_equity (16.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.