India’s $3.9 billion plan to help Modi’s mogul ally after U.S. charges

But the Indian government was crafting its own aid plan.

Internal documents obtained exclusively by The Washington Post detail how Indian officials drafted and pushed through a proposal in May to steer roughly $3.9 billion in investments to Adani’s businesses from the Life Insurance Corporation of India, or LIC — a state-owned entity primarily responsible for providing life insurance to poor and rural families.

The plan came to fruition the same month that Adani’s ports subsidiary needed to raise roughly $585 million in a bond issue to refinance existing debt. On May 30, Adani Group announced that the whole bond had been financed by a single investor — LIC — in a deal immediately decried by critics as a misuse of public funds.

The documents and interviews show it was just one piece of a larger plan by Indian authorities to direct taxpayer money to a conglomerate owned by one of the country’s most prominent and politically well-connected billionaires. It is a vivid illustration of Adani’s clout within the government of Prime Minister Narendra Modi, his longtime ally, and of how officials in New Delhi have come to see his business empire as central to the country’s economic fortunes.

This investigation is based on documents from LIC and the Indian Department of Financial Services (DFS), a branch of the country’s Finance Ministry, interviews with current and former officials at those agencies, as well as three Indian bankers familiar with Adani Group finances. All spoke on the condition of anonymity for fear of professional retribution.

“We categorically deny involvement in any alleged government plans to direct LIC funds,” Adani Group said in response to questions from The Washington Post. “LIC invests across multiple corporate groups — and suggesting preferential treatment for Adani is misleading. Moreover, LIC has earned returns from its exposure to our portfolio.”

The company said that “assertions of undue political favour are unfounded” and “our growth predates Mr Modi’s national leadership.”

LIC, DFS and Modi’s office did not respond to multiple requests for comment.

In a statement posted online after this article was published, LIC said allegations that its investments “are influenced by external factors are false, baseless and far from truth” and that “no such document or plan as alleged in the article has ever been prepared by LIC.” It added that “investment decisions are taken by LIC as per Board approved policies after detailed due diligence. Department of Financial Services or any other body does not have any role in such decisions.”

The investment plan was crafted by officials at DFS in coordination with LIC and India’s main government-funded think tank, NITI Aayog, the documents show, and approved by the Finance Ministry, according to two officials familiar with the matter. NITI Aayog did not respond to requests for comment.

Among the plan’s “strategic objectives,” according to DFS documents, were “signaling confidence in Adani group” and “encouraging participation from other investors” — at a time when the conglomerate had seen its overall debt rise by 20 percent over the last 12 months ending in June, according to company filings for the 2025 and 2026 fiscal years.

Months earlier, Adani had been charged by the U.S. Department of Justice with allegedly perpetrating a “multi-billion-dollar scheme” to get funds from U.S. investors based on false and misleading information. In a separate civil case announced the same day, the Securities and Exchange Commission charged the billionaire with violating securities law.

The U.S. legal proceedings “concern individuals, not Adani companies,” Adani Group said in its statement, adding that “we have categorically denied these allegations.”

In the DFS documents, Adani was hailed as a “visionary entrepreneur” whose company has shown “remarkable resilience in the face of significant challenges.” And those challenges extend beyond the United States.

A 2023 report by Hindenburg, a now-defunct investment research firm, accused Adani Group of stock manipulation and financial irregularities — leading the Securities and Exchange Board of India (SEBI), the country’s stock market regulator, to launch an investigation. SEBI dismissed two of the allegations in September, but others are still pending, according to a source familiar with the investigation and a report last month from Reuters.

“SEBI has already concluded investigations into related-party transactions and found no violations at Adani Ports, Adani Power or Adani Enterprises,” Adani Group said in its statement. “Assertions that probes remain ‘open’ misrepresent SEBI’s orders.”

SEBI did not respond to a request for comment.

LIC, which had purchased stakes in several Adani companies before the scandals, was advised by Indian Finance Ministry officials to invest roughly $3.4 billion in corporate bonds issued by Adani Group and use an additional estimated $507 million to significantly increase its stakes in several subsidiaries, the documents show. Ten-year government bonds offered “limited upside” compared with those issued by Adani’s conglomerate, Finance Ministry officials wrote in their analysis of the investment plan.

Four months after the port bond, it is unclear which, if any, of the additional recommended investments have been made by LIC.

“I would have thought the government of India has much higher priorities,” he added, “but crony capitalism is alive and kicking.”

Adani’s empire has humble beginnings. In 1991, he was working with Cargill, helping the Minnesota-based food and agricultural company develop salt mines in the western state of Gujarat when its deal with the state government collapsed. Adani transformed the roughly 2,000 acres of abandoned desert into a deepwater port in the town of Mundra, which quickly became an infrastructural backbone for India at a moment of economic liberalization and expansion.

Around this time, the up-and-coming businessman made it onto the radar of Narendra Modi, who became a general secretary of India’s Bharatiya Janata Party and in 2001 was elected chief minister of Gujarat. When Modi ran to become prime minister in 2014, he shuttled between campaign stops on an Adani Group jet, and the conglomerate would become central to his vision for a modern, globally competitive India.

The magnate’s multinational company is now a cornerstone of Indian life. Its ports subsidiary handles roughly 27 percent of the country’s cargo; its energy units are the largest private sector producers and distributors of coal and renewable power; and in 2022, Adani Group acquired a controlling stake in NDTV, India’s most-watched English news channel. At one point in 2022, Adani was the second richest man in the world, trailing only Elon Musk.

But scandals shook the company.

In 2023, the New York-based Hindenburg research firm published a lengthy report that accused Adani of artificially boosting his company’s share prices through a web of overseas shell companies. Adani’s companies were dangerously in debt, the report found. The firm took a short position on Adani Group stock, successfully betting on a fall.

“The Hindenburg report was a baseless short-selling attack,” Adani Group said in its statement to The Post.

Last year, Justice Department prosecutors charged Adani, his nephew Sagar Adani and six business associates with lying to American bankers and investors about the company’s business practices between 2020 and 2024. In a five-count indictment, prosecutors alleged that Adani and his associates raised billions of dollars “on the basis of false statements” while bribing Indian officials with more than $250 million in payments to win solar power contracts. The SEC, meanwhile, filed civil charges against Adani and Sagar for violating anti-fraud provisions of federal securities law.

“These offenses were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors,” Deputy Assistant Attorney General Lisa H. Miller said in a statement at the time. “Other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” according to James E. Dennehy, in charge of the FBI’s New York field office.

In a Nov. 21 statement, Adani Group said the charges were “baseless,” assuring “stakeholders, partners and employees that we are a law-abiding organisation.”

The SEC said in an October court filing that it had sought assistance from India’s Ministry of Law and Justice to deliver a summons and complaint to Adani and Sagar in India but that the documents were not delivered.

India’s Ministry of Law and Justice did not respond to a request for comment. John Marzulli, the spokesperson for the U.S. Attorney’s Office for the Eastern District of New York, where the suit against Adani was filed, said the case is “active.” The SEC declined to comment.

Adani has amassed a powerhouse lobbying team in the United States, hiring three leading law firms, according to public disclosures. When President Donald Trump was elected to his second term, Adani issued his congratulations on X, promising to invest $10 billion in “U.S. energy security and resilient infrastructure projects” with the aim of creating “up to 15,000 jobs.”

Six Republican congressmen wrote a letter to Attorney General Pam Bondi in February characterizing the charges against Adani as a “misguided crusade” that would harm U.S.-India ties and deter job creation.

“He is someone … they can rely on to carry out their wishes,” Amin said, adding that it makes him appear “untouchable.”

Yet the crises have hampered Adani Group’s ability to raise cash internationally. Major American and other Western banks have worried about the reputational risk of investing in the conglomerate amid the U.S. probes, according to three Indian bankers familiar with the matter and a Reuters report.

While the DOJ indictment was a public relations problem, one of the bankers said, an ongoing civil probe by the SEC was even more concerning: A finding of guilt could result in Adani being locked out of raising money in the U.S. dollar market, he said, a potentially severe blow to his company’s financial future.

“Our companies have raised over $7 billion in global and domestic debt markets since November 2024,” Adani Group said in its statement to The Post. “This includes major transactions with leading global and domestic investors.” The Adani Group is “financially strong,” the company added, and “narratives suggesting otherwise are not only inaccurate but also misleading.”

But the DFS documents acknowledged that the proposed investment strategy came with risks. “Adani’s securities are sensitive to controversies … causing short-term price fluctuations,” one document said. It noted LIC lost roughly $5.6 billion in gains on paper after the 2023 Hindenburg report, with its investment value falling to roughly $3 billion by February 2023. The value of LIC’s holdings recovered to $6.9 billion by March 2024, the document said — meaning losses had not been fully recouped at that time. The current market value of the investment could not be determined.

“Geopolitical concerns” associated with Adani Group’s stake in a major port in Haifa, Israel, which has been threatened by Yemen’s Houthi rebels, also had deterred investors, officials wrote.

Political backlash was another factor to consider, the documents noted. Congress, the country’s main opposition party, and the Communist Party of India (Marxist) “criticize LIC’s Adani exposure, alleging misuse of public funds,” the documents noted. “Mitigation” strategies included publishing “transparent” investment rationales, while “emphasizing” compliance with Indian regulators, due diligence and “economic benefits” of the investments.

Ultimately, the recommendation from Indian government officials, according to the documents, was to invest more in Adani’s companies because it “aligns with LIC’s mandate” and “supports India’s economic objectives.”

It seemed “abnormal” for LIC to invest such large sums of money in a private corporate entity, said Hazari, who previously worked as an analyst at UBS. And further business troubles for Adani could put the insurance giant at “grave risk,” he added. “If anything happens to LIC … it’s only the government that can bail it out.”

India’s Finance Ministry proposed that LIC spread a majority of its roughly $3.4 billion bond investments into two Adani Group subsidiaries. The first was its ports unit, Adani Ports and Special Economic Zone Limited, which the documents noted were AAA rated by an Indian credit rating agency and offered returns of 7.5 to 7.8 percent, compared to the 7.2 percent returns it could expect on 10-year government securities. The other unit was its green energy subsidiary, Adani Green Energy Limited, which was noted to carry an Indian AA credit rating and could deliver returns up to 8.2 percent.

International credit rating agencies have been less generous in their assessments of Adani’s core businesses. Fitch has given Adani’s port subsidiary and two of his green energy unit investments a BBB- rating.

“It’s far too risky an investment for a low-risk lender like LIC” that is charged with underwriting life insurance for poor and rural citizens, Amin said. “If you are truly an independent government entity, and acting in the best interest of your mandate, I can’t see how that’s where you choose to put your money.”

Adani Group said in its statement that “Adani Ports, Ambuja Cements and several assets” of its green energy and power transmission subsidiaries have “declining leverage and AAA ratings,” though the company did not specify which credit ratings agency it was citing.

Officials also suggested roughly $507 million in LIC funds be used to increase its equity stakes in Adani’s companies. They proposed raising LIC’s stake in Adani Group’s green energy subsidiary from 1.3 to 3 percent, and in its cement unit, Ambuja Cements, from 5.69 percent to 8 percent. Officials also wrote that LIC would consider investing in Adani’s gas and power transmission subsidiaries “if valuations stabilize” following the U.S. probes.

LIC requested that Indian finance officials “facilitate a swift review and approval process,” noting there were “time-sensitive” investments that could deliver returns for its over 250 million policyholders, according to a May letter obtained by The Post. And the plan was subsequently approved by the Finance Ministry, according to two officials familiar with the matter.

India’s support for Adani at a time of mounting legal and financial pressure is likely to save him from having to part with highly valued infrastructure assets, said Buckley, of Climate Energy Finance.

“Why should he sell them if he can actually just get the government of India to keep on funding him?” he said. “It’s the Indian people that have to keep bailing him out.”

Supriya Kumar, Sachi Hegde and Aaron Schaffer contributed to this report. Ravi Nair, the independent investigative journalist who co-wrote this article, was named in a defamation suit filed by Adani Group in September, citing an article he co-wrote for the Indian magazine Frontline, as well as online interviews and social media posts where he discussed his reporting for the Guardian. The lawsuit has been criticized by media rights groups, including the Committee to Protect Journalists, which called on the Indian government to “stop censoring legitimate reporting on powerful business interests.”