By Santosh Kumar Mohapatra
Recently, The Washington Post published an article by Pranshu Verma and Ravi Nair titled India’s $3.9 billion plan to help Modi’s mogul ally after US charges. The article claimed that Indian officials from the Finance Ministry, the Department of Financial Services (DFS), and NITI Aayog browbeat the Life Insurance Corporation of India (LIC) into investing $3.9 billion or Rs 33,000 crore in Adani Group companies.
According to the article, this intervention came at a time when the Adani conglomerate was reeling under repayment stress, facing tightened funding access from major American and European banks after being charged with alleged bribery and fraud in the United States.
However, a closer examination reveals that this claim is deeply flawed, factually inaccurate, and misleading in both intent and presentation.
LIC firmly rejected all allegations. The insurer described the claims as “false, baseless, and far from the truth.” It categorically stated that investment decisions are made independently, following statutory provisions and regulatory guidelines, and always in the best interest of policyholders. LIC clarified that the investment decisions are governed by board-approved policies and well-defined risk management frameworks. Each investment passes through a rigorous process of due diligence, including credit ratings, financial performance evaluations, and market-based bidding.
Former Chairman and Managing Director Siddhartha Mohanty called the report a “misleading narrative,” rejecting the notion of any government interference. LIC’s exposure to Adani entities is minimal, diversified, and profitable, fully aligned with its fiduciary duties.
Actually, the true figure is not $3.9 billion but $585 million (approximately Rs 5,000 crore). This amount was invested in May 2025 in 15-year Non-Convertible Debentures (NCDs) issued by Adani Ports and Special Economic Zone (APSEZ). These NCDs carry a coupon rate of 7.75 percent and hold a ‘AAA’ credit rating, signifying minimal credit risk.
For context, AAA-rated instruments represent the highest degree of safety regarding timely payment of financial obligations. Comparing returns, the NCD’s 7.75 percent yield is higher than the 7.2 percent that LIC could earn from 10-year government securities. Thus, the investment was not only sound from a risk perspective but also ensured better returns for policyholders.
In fact, its exposure to Adani represents less than 2 percent of the conglomerate’s total debt of Rs 2.6 lakh crore. Such investments are part of LIC’s regular operations to diversify its asset portfolio. LIC generates an investible surplus of around Rs 5 lakh crore every year, which it allocates across government securities, bonds, equities, and debentures.
Therefore, linking LIC’s investment in the Adani conglomerate is unwarranted unless clear evidence exists that decisions were not based on sound financial logic. Despite media speculation, LIC’s financial outcomes demonstrate its sound management practices. For the July–September 2025 quarter, its standalone net profit rose 32 percent from the previous year to Rs 10,053 crore. Such performance clearly disproves the notion that LIC is being used to finance politically motivated projects.
Moreover, it becomes difficult to ignore the possibility of a motivated campaign to undermine India’s leading public sector financial behemoth. Such misleading narratives serve a dual purpose: to erode faith in India’s robust public enterprises and to indirectly aid the expansion of foreign and private insurers in India’s lucrative market.
Since its establishment in 1956, the LIC has grown colossus and has been more than just an insurance provider. It is a pillar of India’s socio-economic framework, channelling vast national savings into infrastructure, social sector, and industrial development. LIC continues to stand as a symbol of trust, financial discipline, and national pride—an institution that commands confidence from millions of Indians and continues to drive the country’s economic future.
Accusing such an institution of political favouritism without credible evidence does a disservice to its legacy and the millions who trust it. The Washington Post article misconstrues facts, ignores data, and undermines the integrity of India’s most trusted financial institution.
The author is an Odisha-based economist and columnist. Views are personal.
