Shares of most Adani Group companies tumbled again on Wednesday, extending losses to $86 billion after a short-seller report criticized the Indian conglomerate and despite the group completing a closely watched share sale a day earlier.

The rout in Adani's stocks resulted in its chairperson, Gautam Adani, losing his title of Asia's richest person on Wednesday, after the U.S.-based Hindenburg Research last week accused the conglomerate of stock market manipulation and fraud.

The tycoon slipped to 15th on Forbes rich list with an estimated net worth of $75.1 billion, below rival Mukesh Ambani, the chairperson of Reliance Industries Ltd who ranks ninth with a net worth of $83.7 billion.

Before the critical report by U.S. short-seller Hindenburg, Adani had ranked third.

The losses mark a dramatic setback for Adani, the school dropout turned billionaire whose fortunes rose rapidly in recent years in line with stock values of his businesses that include ports, airports, mining, cement and power. Now, the tycoon is fighting to stabilize his companies and defend his reputation.

The share slides come just a day after the Adani Group managed to muster support from investors for a $2.5 billion share sale for flagship firm Adani Enterprises, in what some saw as a stamp of investor confidence at a time of crisis.

The report by Hindenburg Research alleged improper use by the group of offshore tax havens and stock manipulation. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The group has denied the allegations, saying the short-seller's narrative of stock manipulation has "no basis" and stems from an ignorance of Indian law. It has always made the necessary regulatory disclosures, it added.

Shares in Adani Enterprises, often described as the incubator of Adani businesses, plunged 28% on Wednesday, bringing its losses since the Hindenburg report to more than $18 billion. Adani Ports and Special Economic Zone dropped 19%. Both stocks marked their worst day ever.

"The kind of fall that we are seeing in Adani stocks is scary," said Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities.

Adani Power and Adani Wilmar fell 5% each, and Adani Total Gas slumped 10%, with all three falling by their daily price limits. Adani Transmission was down 3% and Adani Green Energy 5.6%.

Adani Total Gas, a joint venture with France's Total, has been the biggest casualty of the short seller report, losing about $27 billion.

Dollar bonds issued by Adani entities also resumed their slide on Wednesday. The U.S. dollar-denominated bonds of Adani Ports maturing in February 2031 led the losses, falling 3.59 cents to 67.58 cents.

Underscoring the nervousness in some quarters, Bloomberg reported that Credit Suisse had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.

Deven Choksey, managing director of KRChoksey Shares and Securities, said this was a big factor in yesterday's share slides.

After losing $86 billion in recent days – equivalent to 16% of India's annual budget spend of $550 billion announced on Wednesday – the seven listed Adani Group entities now have a combined market capitalization of about $131 billion.

Confidence damaged

"There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report," said Ambareesh Baliga, a Mumbai-based independent market analyst.

"With the stocks down despite Adani's rebuttal, it clearly shows some damage on investor sentiment. It will take a while to stabilize," Baliga added.

Asked whether he was concerned about wider losses on India's equity markets because of the plunge in Adani Group shares, Economic Affairs Secretary Ajay Seth said the government "does not comment on issues related to a particular company."

India's benchmark Nifty index has fallen 2.7% since the Hindenburg report. Data also shows that foreign investors sold a net $1.5 billion worth of Indian equities after the Hindenburg report – the biggest outflow over four consecutive days since Sept. 30.

Scrutiny of the conglomerate is stepping up, with an Australian regulator saying on Wednesday it would review Hindenburg's allegations to see if further enquiries were warranted.

India's markets regulator, which has been looking into deals by the conglomerate, will add Hindenburg's report to its own preliminary investigation, sources have told Reuters. The regulator has not commented on the Adani-Hindenburg saga.

Indian credit rating agency ICRA Ltd, a unit of Moody's Investors Service, said on Wednesday it was monitoring the impact of the developments on its rated portfolio in Adani Group. It added that while the group's large debt-funded capital spending plan was a "key challenge", some of it was discretionary in nature and could be deferred, depending on the liquidity position.

India's state-run Life Insurance Corporation (LIC) said on Monday it would seek clarifications from Adani's management on the short seller report. LIC owned a 4.23% stake in Adani Enterprises as of end-December and more than 9% in Adani Ports and Special Economic Zone. The insurance giant was also a key investor in Adani's recent share sale.

Shares in cement firms ACC and Ambuja Cements, which Adani Group bought from Switzerland's Holcim for $10.5 billion last year, fell 6.2% and 16.7%, respectively.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group.