Cost of Capital Index.
The price of money across the full stack: sovereign, credit, and equity risk capital in one number.
The headline index
The bifurcation of 2025: the RBI cut 125bps and the G-sec eased, yet credit spreads widened, the equity risk premium climbed, and down-rounds hit a decade high. Cheap money for the sovereign, dearer money for risk capital. The index reads 124.
The 5 pillars
Latest reads anchor to official 2025 releases (cited per pillar).
The risk-free anchor: the sovereign 10-year. The base on which every other price of capital is set.
Source ↗ Trading Economics / CCIL, Sept 2026The RBI repo rate: the lever that sets bank lending costs across the economy.
Source ↗ RBI MPC, 5 Aug 2026What the best corporate borrowers pay above the sovereign: the price of credit risk.
Source ↗ India Macro Indicators (CCIL/FIMMDA), 15 Aug 2026Down-round frequency: the price founders pay for equity capital when sentiment sours.
Source ↗ PitchBook / TechCrunch, Dec 2025The earnings-yield-minus-bond gap: what equity investors demand over the risk-free rate.
Source ↗ Gravitywell estimate (NSE earnings yield − G-sec)Smoothed, rebased, winsorised, weighted.
How it's built
Sovereign yield, policy rate, credit spread, equity risk premium, and VC term harshness: the cost of money from the safest rupee to the riskiest.
Each pillar is a rate or spread. We take a 3-month average and rebase to 100 at mid-2024 so the index reads as the price of capital relative to that base.
G-sec 30% · policy rate 25% · credit spread 20% · VC harshness 15% · ERP 10%. The risk-free anchors dominate; risk premia tilt the read.
In 2025 policy rates fell hard while risk premia widened: cheap money for the sovereign, dearer money for risk-takers. The index captures both at once.
The cost of capital leads deployment. A falling CoC presages a deal pickup; a rising one warns of the squeeze before volumes show it.
- · Maturity mismatch: spreads vary by tenor; the 10-year benchmark is used consistently to avoid cherry-picking.
- · Policy vs market: the repo is a lever, the G-sec is a price; both are kept, not collapsed into one.
- · Low-base swings: the ERP and down-round series are winsorised so a small base can't dominate the composite.
- · Cheap ≠ available: a low index means low price, not necessarily easy access; pair with the Confidence read.
Data vintage August 2026. Latest reads anchor to official 2025 releases: Trading Economics / RBI (G-sec, repo), India Macro Indicators (AAA spread), and PitchBook / TechCrunch (down-rounds). The equity risk premium is a Gravitywell estimate (NSE earnings yield less the G-sec); the within-period monthly path is a reconstruction reconciling to the cited sources.
Methodology v3.2 (2026-07). Built to the OECD/JRC composite-indicator handbook and disclosed toward the IOSCO Principles for Financial Benchmarks: distance-to-reference normalisation, 3-month smoothing, a flagged contribution cap, weighted aggregation, plus a drop-one-pillar uncertainty band, an equal-weight robustness cross-check, and a data-coverage ratio (all shown above). Known limitation: the 24-month panel is too short for robust seasonal adjustment; India's March fiscal-year-end spikes are not yet removed. Series are point-in-time; published values are not silently restated.
The price of money, monthly.
The Cost of Capital Index tracks the full stack: sovereign, credit, and equity risk, every month.