FM says Finance Ministry does not advise LIC on investments, Adani investments as per SOPs

Finance Minister Nirmala Sitharaman on Monday said her ministry does not issue advisory or directions to Life Insurance Corporation of India (LIC) regarding its investment decisions, and emphasised that the investments that the state-owned insurer made in Adani Group were as per established SOPs.

India's largest insurer has, over the years, made investment decisions across companies based on fundamentals and detailed due diligence. Following due diligence as per established standard operating procedures (SOPs), it has bought shares across half a dozen listed companies of Adani Group, whose book value stands at Rs 38,658.85 crore and invested another Rs 9,625.77 crore in debt instruments of the conglomerate.

"The Ministry of Finance does not issue any advisory/direction to LIC in connection with matters related to investment of LIC fund," she said in a written reply to a question in Lok Sabha. The investment decisions of the state-owned insurer, she said, are taken by "LIC alone following strict due diligence, risk assessment and fiduciary compliance". Such decisions are governed by the provisions of the Insurance Act, 1938, as well as regulations issued by Insurance Regulatory and Development Authority of India (IRDAI), Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) (wherever applicable) from time to time, she said.

In October, a report in The Washington Post alleged that finance ministry officials orchestrated a plan to steer LIC into investing in the Adani group earlier this year, when the ports-to-energy conglomerate was facing a debt pile and scrutiny in the US. The report highlighted LIC's May 2025 investment of USD 570 million (around Rs 5,000 crore) in Adani Ports & SEZ (APSEZ). Sitharaman said, "LIC has invested Rs 5,000 crore in secured non-convertible debentures (NCD) issued by Adani Ports Special Economic Zone (APSEZ) in May 2025, after doing due diligence following established Standard Operating Procedures (SOPs) as per their Board-approved policies." She went on to state that LIC has invested in the top 500 companies listed on NSE and BSE, and a major portion of its investment currently is in the larger companies out of these.

"Book value of LIC's investment in Nifty 50 companies, as on September 30, 2025, is Rs 4,30,776.97 crore which is 45.85 per cent of its total equity investment," she said. Detailing checks-and-balances that have been put in place, she said the investment functions of LIC are verified by concurrent auditors, statutory auditors, system auditors, internal financial control (IFC) auditors and internal vigilance team. "Periodical inspections are also done by the sector Regulator IRDAI in this regard," she said. "There is no direct oversight by the Government on investments made by LIC."

Detailing LIC's top investments, she said among the private firms, the insurer had the highest equity investment of Rs 40,901.38 crore in Reliance Industries Ltd, followed by Rs 38,846.33 crore in Infosys, Rs 31,926.89 crore in Tata Consultancy Services, Rs 31,664.69 crore in HDFC Bank and Rs 30,133.49 crore in Hindustan Unilever. Similarly, its biggest debt exposure in the private sector is with HDFC Bank where it has a total outstanding of Rs 49,149.14 crore. It is followed by Rs 14,012.34 crore in Reliance Industries, Rs 13,435 crore in ICICI Bank, Rs 11,075 crore in Shriram Finance and Rs 9,625.77 crore in Adani Ports and SEZ Ltd.

Exposure to Adani Group

Among the Adani Group firms, LIC has the highest exposure of Rs 8,646.82 crore in CNG retailer Adani-Total Gas Ltd. This in LIC's overall investment exposure is ranked at 25th, she said. LIC's exposure in Adani group flagship, Adani Enterprises at Rs 8,470.60 crore is ranked 27th on its overall list, while Rs 5,787.73 crore in cement maker Ambuja Cements is 40th. The Rs 5,681.10 crore in APSEZ ranks 43rd on LIC's overall investment list, Rs 3,729.68 crore in power transmission firm Adani Energy Solutions Ltd comes in at 65th, Rs 3,486.10 crore in clean energy company Adani Green Energy Ltd at 71st and Rs 2,856.82 crore in cement maker ACC at 81st.

"As per SEBI guidelines, all listed companies have to disclose the names of the shareholders holding 1 per cent or more of the shares held in the company. Accordingly, the information about companies where LIC holds 1 per cent or more equity stake is available in the public domain," she added.

Diversified Portfolio

LIC is not a small single-purpose fund but India's largest institutional investor with over Rs 41 lakh crore (over USD 500 billion) in assets. It invests across 351 publicly listed stocks (as of early 2025) spanning virtually every major business group and sector. Its investment value in India's top 500 companies has grown tenfold since 2014 -- from Rs 1.56 lakh crore to Rs 15.6 lakh crore -- reflecting strong fund management.

LIC also holds substantial government bonds and corporate debt. Its portfolio is highly diversified spreading risk. LIC's exposure to the Adani group is less than two per cent of the conglomerate's total debt helmed by India's second-richest man Gautam Adani.

Response to Allegations

When The Washington Post published the report LIC had said its investments in Adani group companies have been made independently and in accordance with its board-approved policies following detailed due diligence.

"The Department of Financial Services (in the Union Finance Ministry) or any other body does not have any role in such (investment) decisions," LIC had said in a statement posted on X. "The investment decisions are taken by LIC independently as per Board-approved policies after detailed due diligence. LIC has ensured the highest standards of due diligence and all its investment decisions have been undertaken in compliance with extant policies provisions in the Acts and regulatory guidelines in the best interest of all its stakeholders."