$3.9 Billion Public Funds Diverted to Adani Group by Finance Ministry and LIC: The Washington Post Reports

Key Points

A report published by The Washington Post on Friday, 24 October 2025, revealed that the Life Insurance Corporation of India (LIC) invested around $3.9 billion, or ₹32,000 crore, to refinance Gautam Adani’s corporate debt. The proposal was drafted in conjunction with the Indian Ministry of Finance and NITI Aayog.

LIC is a state insurance company that supports the majority of India’s poor and rural families. In May 2025, the company single-handedly financed a bond of $585 million issued by Adani Ports against a pile of existing debt. Opposition leaders and experts criticised the move, asking why a state-run company was using public funds to take on the risk of a private conglomerate.

The Report

The recent report took a closer look at the incident – referencing internal documents and insider interviews – concluding that the Central Government had drafted the proposal to save Adani’s conglomerate from its rising mountain of debt while diverting the risk to Indian citizens.

But this was only part of a larger scheme. The report showed that the plan was devised by the Indian Department of Financial Services, along with NITI Aayog and LIC, and was approved by the Ministry of Finance.

At the time of the bailout, in May 2025, the group was mounting on debt thanks to the explosive 2023 Hindenburg report, its earlier indictment by the US Department of Justice (DOJ), and the civil charges filed against it by the US Securities and Exchanges Commission (SEC). The report highlighted how the “strategic objectives” of the plan was “signalling confidence in Adani group” and “encouraging participation from other investors”. The DFS documents also called Adani a “visionary entrepreneur” and stated that Adani’s bonds were more beneficial for LIC to invest in than government bonds.

The Finance Ministry, in addition to the $585 million bailout, had directed LIC to invest around $3.4 billion in corporate bonds issued by the Adani Group. It proposed that the investment be split between Adani Ports and Adani Green Energy, which offered returns up to 7.8% and 8.2% respectively compared 7.2% expected from 10-year government securities.

It also proposed that LIC invest $507 million in the group’s subsidiaries – increasing its stake in Adani Green Energy from 1.3% to 3% and in Ambuja Cements from 5.7% to 8%.

The documents further noted how the Congress and CPIM “criticize LIC’s Adani exposure, alleging misuse of public funds.” They went on to outline ‘mitigation’ strategies to counter these allegations.

The Washington Post concluded that the investment strategy was evidence of corporate-state nexus that defines Indian governance.

Risks and Criticisms

The documents mentioned in the report acknowledged that “Adani’s securities are sensitive to controversies … causing short-term price fluctuations.”

LIC had previously also purchased stakes in several of the group's subsidiaries. The report stated that “LIC lost roughly $5.6 billion in gains on paper after the 2023 Hindenburg report, with its investment value falling to roughly $3 billion by February 2023. The value of LIC’s holdings recovered to $6.9 billion by March 2024, the document said — meaning losses had not been fully recouped at that time.”

Following the group’s indictment, US Banks have been hesitant to invest in its subsidiaries. The reputational damage has taken a severe toll on the conglomerate’s market value. Being indicted on the SEC civil charges would bar the group from the US market altogether. Furthermore, several subsidiaries enjoy only a B-grade credit rating outside of India, meaning they are volatile bets.

See Also: MIB Orders Takedown of 138 Videos, 83 Posts Critical of Adani – Mentions Journalists, News Orgs

All this makes investment in the conglomerate risky – too risky for an institute insuring over 250 million citizens. The report quoted several analysts and experts in its report.

Tim Buckley, director of the Climate Energy Finance think tank, said that the government’s decision allows Adani to hold onto his infrastructural assets instead of liquidating them. “It’s the Indian people that have to keep bailing him out,” he said.

Kush Amin, a legal specialist from Transparency International questioned LIC’s risky investment: “If you are truly an independent government entity, and acting in the best interest of your mandate, I can’t see how that’s where you choose to put your money.”

He said that Adani seemed “untouchable” in India. He highlighted how Adani had a relation with Modi long before he became the PM. “He is someone … they can rely on to carry out their wishes,” he said.

Buckley said, “I would have thought the government of India has much higher priorities, but crony capitalism is alive and kicking,” adding that Adani operates under a “different set of rules.”

Hemindra Hazari, an independent finance analyst, said “This government supports Adani and will not allow any harm or any detriment to come to it.” He added that it seemed “abnormal” for a public company to invest so heavily in a conglomerate – “If anything happens to LIC … it’s only the government that can bail it out.”

Replies

Responding to the allegations, the Adani Group categorically denied any involvement in what it termed “alleged government plans to direct LIC funds.” The conglomerate stated, “LIC invests across multiple corporate groups, and suggesting preferential treatment for Adani is misleading. Moreover, LIC has earned consistent returns from its exposure to our portfolio.”

The company added that “assertions of undue political favour are unfounded,” noting that its growth trajectory “predates Mr. Modi’s national leadership.”

Meanwhile, opposition leaders have hit out at the Centre over the allegations. “All patriots out there & all media houses – how about some attention & coverage on how ₹30,000 crores of Indian tax payer money used as Adani’s piggybank,” TMC MP Mahua Moitra asked on social media.

Congress’s Jairam Ramesh said in a statement that this is only the latest episode of the “Modani MegaScam”, which “can only be investigated by a Joint Parliamentary Committee of Parliament that the INC has been demanding for almost three years.”

Responding to the original report, LIC described the allegations as “false, baseless, and far from the truth,” asserting that all its investment decisions are made independently, following board-approved policies and rigorous due diligence. The insurer clarified that “no such document or plan, as alleged in the article, has ever been prepared by LIC to create a roadmap for infusing funds by LIC into Adani Group companies.”

“LIC has ensured the highest standards of due diligence, and all its investment decisions have been undertaken in compliance with existing policies, provisions in the Acts, and regulatory guidelines, in the best interest of all its stakeholders,” the company said in its official statement.

It added that the report appears to have been published “with the intention of prejudicing LIC’s well-established decision-making process and tarnishing its reputation, along with the strong foundations of India’s financial sector.” [Rh]

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