Internal Indian government documents reveal a proposed support strategy worth approximately USD 3.9 billion (roughly ₹32,500 crore) for the Adani Group, owned by Gautam Adani a close ally of Prime Minister Narendra Modi even as U.S. authorities bring charges of fraud and bribery against the conglomerate. The plan, which involves significant investments via the state run Life Insurance Corporation of India (LIC), underscores the government’s determination to signal confidence in Adani’s business empire, according to the documents.
What the Documents Show
- According to the documents, in May 2025 officials in the Finance Ministry and the Department of Financial Services drafted a roadmap for LIC to channel about USD 3.4 billion into bonds issued by Adani subsidiaries (including Ports and Green Energy), and roughly USD 507 million toward increasing LIC’s equity stake in several Adani units.
- The investment rationale listed in the papers highlights the dual purpose of (i) “signalling confidence in Adani Group” and (ii) “encouraging participation from other investors” at a moment when foreign banks were pulling back due to legal and reputational risks.
- The proposal pointed out that Adani Ports & Special Economic Zone’s bond issue (about USD 585 million) needed financing, and LIC acted as the single investor for that transaction shortly after.
- The documents acknowledge risk factors: Adani securities were described as “sensitive to controversies causing short term price fluctuations,” while LIC’s prior paper losses (post the 2023 Hindenburg Research report) were noted.
Legal & Financial Context
- The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) have charged the Adani Group and its executives with misleading investors and bribing government officials to secure contracts.
- The Hindenburg Research report in 2023 further alleged artificial inflation of company values, which triggered share price drops and alarm in international markets.
- The new support plan comes at a time when the Adani Group is under financing stress, elevated debt levels, increased scrutiny from global rating agencies, and hesitancy among foreign lenders to underwrite new risk.
Implications & Reactions
- Crony capitalism charges: Critics argue that using state owned insurance funds to back a private business associated with political leadership undermines market fairness and places public finance at risk.
- Risk to LIC policyholders: LIC’s primary mandate is life insurance for millions of ordinary Indians, diverting large tranches toward corporate risk assets raises governance and fiduciary concerns.
- Government message: For the government, the strategy appears driven by the belief that Adani’s infrastructure and green energy investments are central to national economic ambitions, making his business vitality as important as any private firm’s.
- Investor perception: The back up signal may reassure domestic investors, but international investors might interpret the intervention as weakening independent market discipline, possibly deterring foreign capital.
What to Watch Next
- Whether LIC formally publishes the proposed investment flows and how much has been executed to date.
- Whether the Indian government issues a formal response or clarification on the documents and strategy.
- Whether details of Adani’s bond issuances, valuations and ratings are publicly released with transparency.
- Whether regulatory agencies in India investigate conflicts of interest, governance lapses or deviation from standard investment norms.
- Whether foreign investors react by reassessing the risk – return of Indian corporates and India’s investment regime credibility.
