Anzen India Energy Yield Plus Trust: 8.7% Dividend Yield but -1.6% ROE – A High-Yield Puzzle

At a Glance

Anzen IYEP Trust, an InvIT (Infrastructure Investment Trust) focused on energy assets, is dangling a juicy 8.7% yield while its ROE stares at -1.65%. Trading at ₹118, just above its low, the trust promises steady cash distributions backed by transmission and renewable assets. Yet, profits are a mirage – operating margins hit 89%, but interest and depreciation eat everything. Investors: welcome to the yield circus with capital risk.

Introduction

What do you get when you mix renewable energy assets, predictable cash flows, and massive debt? An InvIT drama starring Anzen. Backed by Edelweiss Real Assets, it owns two transmission projects and has ROFO (Right of First Offer) on 813 MWp solar projects. Sounds sexy, right? But profits keep slipping into negative territory while distributions remain high. Is this a smart yield play or a capital trap with a coupon?

Business Model (WTF Do They Even Do?)

Anzen IYEP Trust:

• Owns & operates energy transmission assets with 29 years balance life.
• Generates revenues via long-term contracts ensuring steady cash inflows.
• Invests in renewables and other energy infra (upcoming solar assets).
• Pays distributions to unit holders from operating cash – whether profits exist or not.

The InvIT is structured to maximize yield, not necessarily EPS. Investors trade off growth for steady payouts.

Financials Overview

Auditor’s Roast: Revenues rising, OPM sky-high, but NP remains negative. Translation: debt + depreciation party never stops.