Finance Minister Nirmala Sitharaman told Parliament that the Finance Ministry issues no advisories or directions to Life Insurance Corporation of India (LIC) on its investment decisions, stressing that LIC’s exposure to Adani Group companies was made strictly as per established standard operating procedures (SOPs). In a written reply to a Lok Sabha question, she clarified that LIC takes all investment calls independently after rigorous due diligence, risk assessment and fiduciary compliance, governed by the Insurance Act, 1938 and regulations from IRDAI, RBI and SEBI where applicable. This comes amid reports alleging government pressure on LIC to invest in Adani firms, which both LIC and the ministry have firmly denied.
LIC’s book value in equity of half a dozen listed Adani companies stands at Rs 38,658.85 crore as of September 30, 2025, with an additional Rs 9,625.77 crore in debt instruments of the conglomerate. In May 2025, LIC invested Rs 5,000 crore in secured non-convertible debentures (NCDs) issued by Adani Ports and Special Economic Zone Ltd (APSEZ) after following board-approved SOPs and internal evaluation. Sitharaman noted LIC invests primarily in the top 500 NSE and BSE-listed companies, with Nifty 50 holdings at Rs 4,30,776.97 crore-45.85% of total equity investments showing broad diversification focused on larger firms.
LIC Denies Government Role, Cites Independent Due Diligence:
LIC had earlier rejected claims of ministry orchestration in a statement on X, asserting that “investment decisions are taken by LIC independently as per Board-approved policies after detailed due diligence.” The insurer emphasised compliance with all extant policies, Acts and regulatory guidelines in the best interest of stakeholders, with no role for the Department of Financial Services or any other body in such choices. A Washington Post report in October had alleged finance ministry officials, along with LIC and Niti Aayog, crafted an “investment plan” for Adani infusions, spotlighting the Rs 5,000 crore APSEZ NCD buy when the group faced debt pressures and US scrutiny.
Sitharaman reiterated there is “no direct oversight by the Government on investments made by LIC,” with multiple checks including concurrent auditors, statutory auditors, system auditors, internal financial control (IFC) auditors, internal vigilance teams and periodic IRDAI inspections ensuring transparency. She described LIC’s process as autonomous, reliant on company fundamentals and thorough vetting across sectors.
Adani Investments Part of Broader Portfolio Strategy:
LIC’s Adani holdings reflect its strategy of backing fundamentally strong large-caps, with the equity book value underscoring long-term positions built over years rather than sudden shifts. The Rs 5,000 crore APSEZ NCD was a secured debt play post-due diligence, aligning with LIC’s debt portfolio diversification amid stable yields from infrastructure-linked instruments. Overall, LIC’s investments span top indices, minimising concentration risks while supporting economic growth sectors like ports, energy and logistics where Adani operates.
The ministry’s response aims to quell perceptions of undue influence, especially after global media scrutiny tied to Adani’s Hindenburg-era challenges and subsequent recoveries. By highlighting SOP adherence and regulatory oversight, Sitharaman positioned LIC as a professional investor operating at arm’s length from government directives.
Regulatory Safeguards and Policy Emphasis on Autonomy:
Investment functions at LIC undergo layered scrutiny to uphold fiduciary duties, with IRDAI’s periodic reviews adding an independent layer beyond internal audits. Sitharaman’s reply underscores a broader policy of non-interference in PSUs’ commercial judgments, allowing market-driven decisions within regulatory bounds. This framework, she implied, protects policyholders’ interests while enabling LIC to deploy Rs 4.3 lakh crore-plus in Nifty 50 alone for optimal returns.
The disclosure comes as LIC navigates a maturing market with rising equity allocations, balancing yields from debt like Adani NCDs against growth in listed equities. No evidence of ministry “roadmaps” or approvals was acknowledged, reinforcing LIC’s standalone stature despite its public sector tag.
