India's $3.9 Billion LIC Investment in Adani Group: Controversy and Clarifications
On October 24, 2025, The Washington Post published an investigative report alleging that Indian government officials orchestrated a plan to channel approximately $3.9 billion (around ₹33,000 crore) from the Life Insurance Corporation of India (LIC) into the conglomerate companies of Gautam Adani. According to the report, documents from LIC and India's Department of Financial Services (DFS), a branch of the Finance Ministry, suggested the Finance Ministry fast-tracked this investment plan in May 2025 to support Adani Group, which was facing financial pressures and debt refinancing needs.
Key Allegations from The Washington Post Report
The Finance Ministry and DFS officials allegedly drafted and pushed through a proposal advising LIC to invest heavily in Adani Group corporate bonds and take equity stakes in several Adani subsidiaries, citing better yields compared to government securities.
The report claimed the proposal aligned with LIC's mandate to support economic objectives, despite warnings about the volatility and risks associated with Adani Group securities.
In May 2025, LIC reportedly financed a ₹5,000 crore bond issue of Adani Ports and Special Economic Zone Ltd (APSEZ) entirely, a transaction that drew criticism from opposition leaders calling it misuse of public funds.
Documents hinted that Adani Group's securities were sensitive to controversies, causing price fluctuations, and that LIC had losses from a previous 2023 Hindenburg report on Adani, only partially recovered by 2024.
The report accused Indian authorities of using taxpayer money to bail out a politically connected conglomerate, raising questions about government influence on LIC's investment decisions.
Strong Denials from LIC and Indian Government
LIC categorically rejected the Washington Post report as "false, baseless, and far from the truth," stating no government official or department had influenced its investment decisions or drafted any such proposal.
LIC confirmed that all investment decisions are made independently following board-approved policies and thorough due diligence.
LIC emphasized its exposure to Adani Group is significantly lower compared to its investments in other large Indian corporate groups such as Tata and Aditya Birla.
The insurer pointed out that LIC invests around ₹5.5 lakh crore annually, and the alleged $3.9 billion investment represents less than 1% of its total annual investments.
A government official clarified that the Department of Financial Services did not write any letters or instructions to LIC to invest in Adani Group companies.
The Adani Group also denied any government plans or preferential treatment and stated LIC's investments span multiple corporate groups, and that LIC has earned returns from its investments in Adani companies.
Political and Public Reactions
Opposition parties, including Congress, criticized the alleged investments by LIC in Adani Group bonds and demanded a probe by the Public Accounts Committee.
Critics raised concerns about the use of public funds to support a private conglomerate amid controversies surrounding Adani, including allegations of criminality and a 2024 indictment in the US related to bribery and fraud.
The Adani Group was described in DFS documents cited by the report as "a visionary entrepreneur" with resilient businesses despite challenges, underscoring the government's economic interest in supporting the group.
Context of the Investment
LIC's investment in Adani Ports & SEZ bonds was underpinned by a 'AAA' credit rating, the highest in India, offering a 7.75% coupon rate.
The bonds were meant to refinance existing debts for Adani Ports, and LIC was reportedly the sole investor in the bond issuance.
LIC has historically been a major institutional investor in Indian infrastructure and corporate bonds and places significant emphasis on long-duration, high-rated infrastructure investments to meet its liabilities.
This case highlights the ongoing tensions between government, corporate interests, and public scrutiny over large investment decisions in India’s financial sector. The LIC vehemently denies government interference and maintains that its investments are transparent and independently made, while opposition voices demand greater accountability given the complex backdrop of financial and reputational risks associated with the Adani Group.