Beta for WACC Calculation
I am building financial model for a ecommerce startup in India. Trying to calculate WACC, but there is no public company listed on NSE or SENSEX in ecommerce industry. In such case which sectors/companies beta I may use? May I use IT Companies (TCS, Infosys) as benchmark for these values?
No expert in startup valuations, so take this with a grain of salt but here are the thing that come to mind:
Hope that others will chime in that have more experience
Thankyou IB for your valuable inputs. Allow me to elaborate on the ecommerce startup.
This start-up is still at the research stage with no actual sales or any market presence, which will be serving somewhat similar market as IndiaMART (a private co.)
I am trying to calculate WACC/Discount rate to discount projected FCFF & Terminal value for business valuation. I have risk-free rate but there is no beta or the expected return on market to arrive at market risk premium. Comparable data(beta & return) I have is only of these big ecommerce company (Amazon, Alibaba ) that too from NASDAQ.
Use the build-up method
https://thebusinessprofessor.com/knowledge-base/build-method/
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