LIC-Adani Saga: A Bid to Kill the Golden Goose
P G Dileep
THE Washington Post published an investigative report on October 29, 2025, claiming that the Indian government had unofficially directed LIC to invest $3.9 billion in the embattled Adani Group. It is important to lay out the facts for the public to realise the challenges that LIC may have to face in future. Life Insurance Corporation (LIC), the biggest public sector undertaking in India, holds 65 per cent of market share even today, despite facing tough competition from 25 private life insurance companies including foreign ones for the past 26 years. It ensures the financial security of the central government. It is literally the goose that lays golden eggs.
The reason behind LIC withstanding competition from the private sector and remaining steadfast is because of the trust it has earned from the public as well as its vast and sincere force of agents which is a global model and which even the private companies attempt to adopt. LIC agents can never tolerate anything that spoils its reputation. If LIC is destroyed as part of crony capitalism, the organisation of agents -- LIC Agents' Organisation of India -- cannot simply remain silent because its slogan is “SAVE LIC, PROTECT AGENTS”.
The Adani Group is facing investigation in the US for alleged bribery. Due to this, the conglomerate is facing a big crisis and financial liability. In this situation, they try to take a new loan to settle their huge loan. So, the Adani Group is issuing debentures to the extent of Rs 5,000 crore. At this time, the Department of Finance is holding a meeting including Niti Aayog. As a part of this, an analysis report is being made. The minutes of the meeting mention that the Adani Group is a big business group. The Adani Group has a debt between Rs 3,05,000-3,15,000 crore. Moreover, its net profit last year was only Rs 45,000 crore. Adani Property is not a listed company and has a debt of Rs 34,000 crore. This has not been included in the debt of the whole group. Thus, when the Adani Group is finding it difficult to repay its heavy debts, the Ministry of Finance is issuing unofficial directions to LIC without any documentation.
In the 13-member Board of LIC, eight members, except the chairman and four whole-time managing directors, are government-appointed directors. Even the appointment of chairman and four managing directors are done as per government directions. While it is so, whatever decisions taken by them will not be beyond the unofficial decision taken by them. For the very same reason LIC immediately wrote to the Ministry of Finance. It has therefore sought for approval to take the whole Rs 5,000 crore, for which Adani is issuing debenture bonds. LIC is being forced to do this under the circumstances that all banks are reaching their limits of loans. As a part of this, immediately in the debenture issue in December last, Adani Group had discussed with the bank consortium. Moreover, the central government is allowing Adani Group to encash the public trust in LIC. When a private company is in crisis, why should the government protect its credibility by transferring funds? It is here that the suspicious relationship between the Prime Minister and the Adani Group becomes a subject of discussion.
Earlier a report by Hindenburg had come on the Adani Group. After that, agencies such as the Securities and Exchange Board of India (SEBI) made an inquiry. Though Adani Group dismissed the Hindenburg report, no one knows the real facts. In an affidavit filed in the Supreme Court, SEBI stated that it had investigated 24 charges against the Adani Group. SEBI dismissed only two out of these. During this period, Adani had given an application to SEBI agreeing to pay a fine and settle the account. The truth is not known. Since this has happened earlier also, we can presume that Adani Group has settled this case.
There are cases pending against Adani Group in the Securities and Exchange Commission and the Department of Justice in the US. If all the above situations are read together, it may not be easy for them to raise foreign funds. Adani Group has also clearly stated that they are not going to raise foreign funds till 2027. That was an understated reaction to the whole situation. It is at this time that Adani Group is obliged to settle a loan which became due in May. It is among so many developments that this news report of the Washington Post appears.
An understanding has been reached for LIC to buy $ 3.5 billion (approximately Rs 33,000 crore) worth of bonds issued by Adani Group. If LIC invests in Adani Group it will help increase trust in the company. As a part of this, LIC can buy the whole loan bond issued by Adani Group. Apart from that, LIC can invest Rs 25,000-30,000 crore in Adani bonds. Over and above the bond, LIC can buy shares of Adani Group for Rs 3,000 crore. Share market is good gambling. LIC has good fund management. LIC normally invests in the 351 best performing companies. Till now LIC has invested only 4 per cent share of Adani Group. For the very same reason LIC can do good trading. It can reap huge profits from share trading. Adani is giving a very small dividend. All other companies give very good dividends. As such, why should the government push LIC to invest its money in Adani Group? Why put pressure on LIC to increase the investment in Adani Group?
LIC is investing Rs 5,000 crore for 15 years for an interest of 7.75 per cent. When secured investment with government sovereign guarantee is available, it is unbelievable that LIC invests on its own for a meagre increase of 0.5 per cent. It is not like LIC buying shares and selling it at a higher rate. This is a debenture bond. It can be encashed only on maturity. LIC’s biggest investment is in bonds. The speciality is that these are secured and have government sovereign guarantee. Till September 2025 LIC’s investment in bonds is Rs 15,64,000 crore. Investment in private bonds is only Rs 80,000 crore. The biggest such investment was Rs 13,000 crore in Reliance as per unofficial direction from the government.
After all these reports came out, the Indian media negated these reports. The Indian media reported that LIC has invested much more funds in other companies than in Adani Group. Funnily enough, no one has signed in the press note given by LIC. The negative reports were that following the investments in Adani Group by LIC, even American companies have put in their money. What appeared in the Indian media is the narrative given by Adani Group. There have been umpteen number of allegations against Adani Group. They have been able to defend all these with the most efficient PR work, and that is their hallmark. Due to this, none of the electronic and print media reported this.
In the coming years also, we should be in the forefront to protect LIC with a clear understanding of the history. Foreign and Indian insurance companies have existence here only if LIC is broken. The fact should be convincingly presented to 30 crore policyholders and the public. The central government is continuing its many attempts to destroy LIC in this way. This is to help Indian corporates. If this situation continues, strong protest programmes will have to be organised with the support of the public to protect LIC. This is the duty, responsibility and obligation of those who love India, this also applies to those who preach patriotism.
