Trends in cost of capital in India A recent survey done by the consulting firm Ernst & Young (EY) and National Stock Exchange (NSE) highlights some interesting data about the cost of capital of Indian businesses. “The Cost of Capital Survey” is an “attempt to understand the threshold cost of equity that India Inc. used for its capital allocation and investment decisions, and the process by which practicing finance professionals in the industry make capital costing decisions.” The key findings of the Survey are as follows: · India’s average cost of equity is ~14%. This has declined by ~100 basis points since our last cost of capital survey, over a period in which interest rates have declined by ~50 basis points. · Real estate, healthcare (including pharmaceuticals and life sciences) and renewables command the highest cost of equity, whereas chemicals, media and entertainme...