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Criticism Over LIC Subscribing Rs 5000 Cr Adani Ports NCD Issue

The debate is about the role of LIC, a state-controlled insurer funded by the life savings of millions of Indians, in selectively supporting specific private players.

Adani Ports and SEZ Ltd Edited by
Criticism Over LIC Subscribing Rs 5000 Cr Adani Ports NCD Issue

Criticism Over LIC Subscribing Rs 5000 Cr Adani Ports NCD Issue

The Life Insurance Corporation of India’s (LIC) full subscription to a Rs 5,000 crore bond issue by Adani Ports and Special Economic Zone Ltd. (APSEZ), announced just days ago, has drawn sharp criticism from various quarters, who question the growing trend of using public sector funds to back large private conglomerates.

The debate is about the role of LIC, a state-controlled insurer funded by the life savings of millions of Indians, in selectively supporting specific private players.

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Journalist Paranjoy Guha Thakurta has been among the most vocal critics, stating that the move raises serious concerns about the fiduciary responsibility of LIC, an institution built on the savings and trust of ordinary Indian citizens.

Taking to the X platform, he wrote, “I was under the impression that the Life Insurance Corporation belongs to the people of India,” Thakurta remarked in a pointed social media post. “Oops, I forgot: India belongs to…?”


The ₹5,000 crore investment, structured as a 15-year non-convertible debenture (NCD) carrying a 7.75% coupon rate, was made solely by LIC and marks one of the largest long-duration domestic bonds recently issued by the Adani Group.

The proceeds are intended for capital expenditure, debt refinancing, and general corporate purposes as APSEZ undertakes an ambitious ₹12,000 crore capex plan for FY26, including its $2.5 billion acquisition of the North Queensland Export Terminal (NQXT) in Australia.

As of March 31, 2025, LIC held an 8.06% equity stake in Adani Ports and had an estimated ₹80,000 crore invested in corporate bonds across sectors.

The sheer scale of its exposure to corporate debt and particularly to the Adani Group  has triggered a debate on risk concentration and governance standards as well.

The bond offering comes at a time when major borrowers, including Bajaj Finance, Tata Capital, and the National Bank for Financing Infrastructure and Development, were in the market to raise ₹5,000 crore but managed to retain only ₹2,100 crore, offering 5-year paper at 6.67%.

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APSEZ, which operates 15 ports and terminals across India, also has an international footprint with operations in Israel, Australia, Sri Lanka, and Tanzania. In addition to port management, it controls a large logistics network and provides port-based marine services at its facilities.

In January 2024, APSEZ had raised ₹250 crore via 10-year bonds at a significantly higher coupon of 8.80%, at a time when 10-year government securities were yielding around 7.2%. The latest bond, at 7.75%, reflects improved market confidence in the company’s debt profile and refinancing strategy.

Emails by media organisations sent to both the Adani Group and LIC seeking comment on the bond subscription and rationale behind the investment decision went unanswered.

LIC, which holds an 8.06% equity stake in Adani Ports, continues to play a dominant role in the corporate debt market. In FY25 alone, the insurer invested ₹80,000 crore in bond issuances by Indian companies — a 30% increase from the previous fiscal year.

This growing exposure has led to increased scrutiny, especially as its largest recent investments appear to disproportionately support a few large business houses.

Topics
adani ports Adani Ports and SEZ Ltd Adani Ports And Special Economic Zone Adani Ports and Special Economic Zone Ltd. (APSEZ) Adani Ports issue Adani Ports LIC Adani Ports LIC covered

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