NILAINFRA.NS WACC - Weighted Average Cost of Capital

The WACC of Nila Infrastructures Ltd (NILAINFRA.NS) is 11.0%.

The Cost of Equity of Nila Infrastructures Ltd (NILAINFRA.NS) is 11.40%.

The Cost of Debt of Nila Infrastructures Ltd (NILAINFRA.NS) is 8.00%.

	Range	Selected
Cost of equity	10.00% - 12.80%	11.40%
Tax rate	29.80% - 31.30%	30.55%
Cost of debt	7.60% - 8.40%	8.00%
WACC	9.7% - 12.2%	11.0%

WACC

NILAINFRA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.38	0.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	12.80%

Tax rate	29.80%	31.30%
Debt/Equity ratio	0.08	0.08
Cost of debt	7.60%	8.40%

After-tax WACC	9.7%	12.2%


Selected WACC	11.0%

NILAINFRA.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 NILAINFRA.NS:

cost_of_equity (11.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.38) + 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.