Finance Ministry pushed LIC to invest billions in Adani Group despite risks, says US media report
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A report by The Washington Post has claimed that India’s Union Finance Ministry fast-tracked a proposal earlier this year directing the Life Insurance Corporation of India (LIC) to invest billions in the Adani Group, despite being aware of the associated risks.
According to the investigation by Pranshu Verma and Ravi Nair, officials at the Department of Financial Services (DFS) collaborated with LIC and Niti Aayog to create the investment plan, which was later approved by the Finance Ministry.
The report is based on documents from the DFS and LIC, as well as interviews with current and former officials and three bank executives familiar with Adani Group’s finances.
The proposal, made in May 2025, involved directing approximately $3.9 billion from LIC to an Adani Group company at a time when the conglomerate was seeking funds to refinance its dollar-denominated debt.
The report noted that in 2024, U.S. prosecutors had charged eight individuals, including Gautam Adani, for allegedly agreeing to pay around $265 million in bribes to Indian government officials to secure contracts for a solar power project. Following the indictment, several global banks were hesitant to extend loans to the group.
On May 30, 2025, Adani Ports and Special Economic Zone Ltd (APSEZ) announced that it had raised ₹5,000 crore through a 15-year Non-Convertible Debenture (NCD), carrying a 7.75% coupon rate. The issue was fully subscribed by LIC, which APSEZ said was backed by “APSEZ's strong financials and a ‘AAA/Stable’ domestic credit rating.”
The Washington Post report stated that the Finance Ministry suggested LIC distribute its $3.4 billion bond investments between APSEZ and Adani Green Energy Ltd, citing higher returns compared to 10-year government securities. The officials also recommended that LIC use its funds to increase equity holdings in Adani Group’s Ambuja Cements and Adani Green Energy.
Documents reviewed by the publication showed that the DFS was aware of the risks tied to the plan, noting that Adani’s securities were “prone to short-term price fluctuations.” The report also mentioned that LIC requested a “swift review and approval process” for the time-sensitive investment.
The LIC’s exposure to the Adani Group has drawn public criticism, as the insurer is seen as the primary custodian of middle-class savings and long-term, low-risk investments.
Rahul Gandhi, the Leader of Opposition, posted on social media in June 2025, writing, “Money, policy, premium are yours; Security, convenience, benefit for Adani!”
In response to The Washington Post’s questions, the Adani Group denied the allegations of any government-directed investment plans. The company stated, “LIC invests across multiple corporate groups — and suggesting preferential treatment for Adani is misleading. Moreover, LIC has earned returns from its exposure to our portfolio.”
The LIC also issued a strong rebuttal, calling the report’s claims “false, baseless, and far from truth.” It said, “No such document or plan as alleged in the article has ever been prepared by LIC, which creates a road map for infusing funds by LIC into Adani group of companies.”
It further clarified that “Department of Financial Services or any other body does not have any role in such decisions. LIC has ensured the highest standards of due diligence and all its investment decisions have been undertaken in compliance with extant policies, provisions in the Acts and regulatory guidelines, in the best interest of all its stakeholders.”
The insurer also said that the article’s claims “appear to have been made with the intention to prejudice the well-settled decision-making process of LIC and also to tarnish the reputation and image of LIC and the strong financial sector foundations in India.”