Indian tycoon Gautam Adani has abandoned a $2.5 billion fundraising effort in his latest setback following a short seller attack on his business empire

• Indian tycoon Gautam Adani pulled a $2.5 billion share sale for Adani Enterprises on Wednesday.
• Shares in Adani Group companies have lost $92 billion in market cap since a US short seller's fraud allegations.

Indian business tycoon Gautam Adani pulled a $2.5 billion share sale on Wednesday after shares in his flagship Adani Enterprises extended massive losses following a short seller attack.

The stunning reversal came even though Adani Enterprises' offering was fully subscribed Tuesday thanks to institutional investors, Bloomberg reported. However, demand from retail investors was low.

"Today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company's board felt that going ahead with the issue would not be morally correct," Adani, who is the chairman of Adani Enterprises, said in a statement on Wednesday.

Listed companies under the Adani Group have lost $92 billion in market capitalization since Hindenburg Research, a US short seller, released a scathing report last Tuesday alleging "brazen stock manipulation and accounting fraud scheme" at the Adani Group. Shares of Adani Enterprises, the conglomerate's flagship, lost 28% in one day on Wednesday and are down 43.5% in market value this year.

The Adani Group has been defending itself vigorously, but Hindenburg has also doubled down on its initial report.

The fallout has rattled the market. The Securities and Exchange Board of India, the country's market regulator, is looking into the massive selloff, as well as any irregularities in the secondary share sale, Reuters reported on Wednesday, citing a source with direct knowledge of the matter.

Adani himself has lost nearly $50 billion in net worth from the stock rout this year so far, costing him the crown as Asia's richest person, per the Bloomberg Billionaires Index.

Adani is now worth about $72 billion, falling behind fellow Indian billionaire Mukesh Ambani. The latter, who is the chairman of conglomerate Reliance Industries, is now the world's richest Asian, with a fortune of $81 billion.

The Securities and Exchange Board of India and the Adani Group did not immediately respond to Insider's requests for comment.