Financial Management & Corporate Finance Case Study

The Adani Group`s Hindenburg Fiasco

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Abstract:
The Adani Group, headquartered in Ahmedabad, India, was founded by Gautam Adani in the year 1988. A diversified group, its businesses included airport and sea management, mining, food, natural gas, weapons, infrastructure, transmission, and electricity generation. As of March 31, 2023, its revenue stood at US$33 billion. In January 2023, Hindenburg Research, a New York based investment firm, in its report titled, “Adani Group: How The World's 3rd Richest Man Is Pulling The Largest Con In Corporate History”, accused the founder and the group of manipulating the stock price. Immediately after, the group plunged into a public relations crisis and it was forced to call off a $2.4 billion sale of shares. Following this, Adani Group’s stocks plummeted by over fifty percent to an appraised US $50.2 billion as of March 2023 and Gautam Adani’s ranking on the Forbes Real Time Billionaires List fell to 24th place from 3rd.

This case covers in detail the allegations made by Hindenburg. It draws attention to various ethical issues. Students can assess the operating efficiency and overall stability of the company by analyzing Adani Group’s profitability ratios.

Pedagogical Objectives:

• Gauge a firm’s financial performance with an emphasis on financial ratio analysis.
• Create financial ratios for a company
• Evaluate the shortcomings of ratio analysis
• Analyze the financial position of a company

Keywords : Financial Statement; Liquidity Ratios; Solvency Ratios; Profitability Ratios

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