Analysts warn that taxpayer exposure to Adani’s debt could backfire if the conglomerate falters amid global credit tightening.
BY PC Bureau
New Delhi, October 2025 — When Gautam Adani’s empire faced mounting debt earlier this year, help did not come from wary global lenders but from a taxpayer-backed institution designed to safeguard the savings of ordinary Indians.
An investigation by The Washington Post (May 2025) revealed that senior officials in India’s Department of Financial Services (DFS) drafted a proposal in May to channel nearly $3.9 billion from the Life Insurance Corporation of India (LIC) into Adani Group companies. The plan, prepared in consultation with LIC and NITI Aayog, cited among its objectives “signaling confidence in Adani Group” and “encouraging participation from other investors.” It was subsequently approved by the finance ministry, according to two officials cited by the paper.
The financial injection quickly translated into cash. In late May, Adani Ports and Special Economic Zone (APSEZ) launched a Rs 5,000-crore ($585 million) bond issue to refinance existing debt. LIC, as a single investor, purchased the entire tranche. The deal, executed quietly, has drawn political scrutiny, with opposition leaders describing it as a bailout for a billionaire with close political connections.
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Lok Sabha Leader of Opposition Rahul Gandhi criticised the arrangement, posting on X on June 3: “पैसा, पॉलिसी, प्रीमियम आपका — सुरक्षा, सुविधा, फायदा अडानी का!” (“Money, policy, premium are yours; security, convenience, and benefit are Adani’s!”). Gandhi accused Prime Minister Narendra Modi’s government of using citizen premiums to support a favoured corporate ally, a sentiment echoed by CPI(M) and other opposition parties, who called the LIC–Adani deal a “misuse of public funds.”
Adani’s association with Modi dates back to the early 1990s, when he developed the Mundra Port in Gujarat. Over the next decades, Adani companies became central to Modi’s infrastructure agenda, spanning ports, power, airports, cement, and renewable energy. Today, Adani Group handles roughly a quarter of India’s cargo and dominates private-sector power generation. Analysts note that LIC’s investment signals clear state patronage.
The funding came as Adani faced legal challenges abroad. In 2024, the US Department of Justice charged Gautam Adani, his nephew, and associates with multi-billion-dollar fraud and bribery schemes, alleging investor deception and payments exceeding $250 million in bribes to win solar-energy contracts in India. Parallel civil charges were filed by the US Securities and Exchange Commission. Adani Group denied wrongdoing, claiming the cases concern individuals, not companies.
Explosive break in @washingtonpost by @t_d_h_nair and @pranshuverma_. $3.9 billion LIC investment in Adani group bonds and shares were recommended by the DFS to “signal confidence in Adani group” and “encourage participation from other investors” after US indictment. pic.twitter.com/DwuImFyNuI
— Abir Dasgupta (@AbirDasgupta101) October 24, 2025
Domestically, SEBI continues to investigate allegations raised in the 2023 Hindenburg Research report, which accused Adani Group of stock manipulation and accounting irregularities. While some charges were dismissed, others remain open. DFS documents cited by The Washington Post noted that LIC had lost roughly $5.6 billion in paper value on its Adani holdings after the Hindenburg report, yet officials concluded additional investment aligned with LIC’s mandate and India’s economic objectives.
Government analysts justified the move, noting that Adani’s bonds offered yields between 7.5–8.2%, higher than 10-year government securities at 7.2%. They recommended LIC invest about $3.4 billion in Adani Group bonds and $507 million to increase stakes in Adani Green Energy and Ambuja Cements. While the infusion eased refinancing burdens and reassured markets, critics warned that public money was underwriting private risk.
Adani Group rejected claims of government-orchestrated support, asserting that LIC invests across multiple corporate groups and that the exposure had generated returns. LIC, the DFS, and the Prime Minister’s Office declined to comment. Defenders argue that Adani projects are vital to India’s infrastructure expansion, making the investment a logical long-term bet.
Sabka Saath, Sirf Adani Ka Vikas! 3.9 billion dollars of your money, the tax payer’s money from LIC used to bailout #Adani, an expose by Washington Post shows. The expose cites official documents from Niti Ayog and Finance Ministry for a plan to bail out the Prime Minister’s BFF,… https://t.co/YpWGXQBaV7
— Prof. Varsha Eknath Gaikwad (@VarshaEGaikwad) October 24, 2025
However, the optics remain controversial. A debt-laden conglomerate under US investigation receiving backing from India’s largest public insurer raises concerns over governance, transparency, and the fusion of political and corporate power. Rahul Gandhi’s refrain—“premium yours, benefit Adani’s”—has become emblematic of the tension between state developmental ambitions and the risks of entwining public money with private fortunes.
