The conglomerate of embattled Indian billionaire Gautam Adani will review its plans for raising capital after calling off a $US2.5 billion ($3.5 billion) share sale following the loss of tens of billions of dollars in market value due to claims of fraud by a US-based short-selling firm.

Adani Enterprises cancelled the share sale late on Wednesday, citing “market volatility”.

Stocks in the coal mines to ports empire sank after Hindenburg Research, which has a track record of sending stock prices of its targets tumbling, accused the group of “brazen” stockmarket manipulation and accounting fraud, among other financial abuses.

The share sale was seen as a crucial test of investor confidence in Adani, whose net worth leapt 2000 per cent in recent years as share prices for his listed companies soared.

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At the close of trade on Wednesday, Adani Enterprises was down by a whopping 28 per cent. But the share offering had drawn nearly 51 million bids, exceeding the 45.5 million offered to the public.

Stock in six of Adani’s other listed companies sank between two per cent and 19 per cent.

Early on Thursday, Adani Enterprises was down by five per cent. Stocks in four of Adani’s other listed companies were down by 10 per cent and two others sunk between five per cent and eight per cent.

In a video address on Thursday, Mr Adani said the decision to scrap the share offering was made “to insulate the investors from potential losses”.

Adani Enterprises said it would withdraw the transaction and return the money to its investors.

The decision would not “have any impact on our existing operations and future plans”, it said, adding the group’s balance sheet was “very healthy” with strong cash flows and secure assets.

Adani made a vast fortune mining coal as energy-hungry India grew swiftly after its economy was liberalised in the 1990s.

Adani companies operate airports, build roads, generate electricity, manufacture defence equipment, develop agricultural drones, sell cooking oil and run a media outlet.

Hindenburg said it was betting against the group, accusing it of “pulling the largest con in corporate history”.

It said it judged the seven key Adani listed companies to have an “85 per cent downside, purely on a fundamental basis owing to sky-high valuations”.

Most of the allegations involved concerns about the group’s debt levels, activities of top executives, use of offshore shell companies to artificially boost share prices and past investigations into fraud.

Adani Group dismissed Hindenburg’s allegations, and called its report a “calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India”.

The stock losses on Wednesday cost Adani his title as the richest man in Asia and in India.

Adani also slid from a ranking of being the world’s third-richest man to the 13th as his fortune plummeted to $US72 billion, according to Bloomberg’s Billionaire Index.

Before the Hindenburg report, his net worth was about $US120 billion.

-AP