indian opposition demanded investigation against Adani ? as the group's losses exceed $100 billion.

opposition MPs called for a parliamentary inquiry after a US short seller accused Adani Group of fraud.

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, US forensic financial research firm Hindenburg Research published a report accusing Adani Group of stock market manipulation and fraud.

India's opposition lawmakers called for an investigation into Adani Group as the crisis surrounding the struggling Gautam Adani empire deepened and market losses topped $100 billion after a US short seller accused it of "committing the biggest fraud in corporate history".

A session of India's lower house of parliament was suspended on Thursday amid loud protests, a day after major group Adani rejected a $2.5 billion share offer aimed at helping reduce debt, restore confidence and expand its shareholder base.

The opposition Congress Party demanded an inquiry into the matter under the supervision of a Joint Committee of Parliament or the Supreme Court and asked Prime Minister Narendra Modi to take up the matter.

"Considering public interest, we want a thorough inquiry into the Adani matter either by a joint committee of parliament or a bench under the supervision of the Supreme Court," said Leader of Opposition Mallikarjun Kharge. - The investigation of the matter should also be reported daily.

In a report published last week, investment research firm Hindenburg Research accused the Adani Group of "a decades-long scheme of disgraceful stock manipulation and accounting fraud." It also raised concerns about high debt and the valuation of Adani's seven listed companies.

Since the Hindenburg report on January 2

, the companies in the group have lost almost half of their combined market value. Adani Enterprises, described as Adani's business incubator, lost $2

billion in market value.

Adani Group has denied the allegations, with its chief financial officer calling the Hindenburg report "a damaging combination of selective disinformation and outdated, baseless and unreliable claims that have been tested and rejected by India's highest courts".

Meanwhile, Gautam Adani released a video message to investors in which he said his group's fundamentals are "strong" and its debt repayments are "impeccable".

"The interest of my investors is paramount and everything else is secondary," he said. "Therefore, we withdrew the share sale to protect investors from potential losses.

Foreign investors, many of whom are already weary of the overvalued stock market, are reducing their exposure.

Adani Enterprises shares fell nearly 23 percent on Thursday, the lowest since March. 2022. Other companies in the group were also under pressure, with Adani Ports and Special Economic Zone down 5 percent, while Adani Total Gas, Adani Green Energy and Adani Transmission were down around 10 percent each.

Adani, 60, is also no longer Asia's richest person, falling to 16th place on Forbes' list of the world's richest people last week.

"If Adani fails to restore the confidence of institutional investors, the stock will be in free fall," said Avinash Gorakshakar, head of research at Profitmart Securities in Mumbai.

Adani's holdings have the potential to expand if it triggers a larger sentiment shift, said Sat Duhra, who manages Janus Henderson Investors' $1 billion Asia Dividend Income fund.

"Indian stock market indices are largely driven by a few companies and any change in sentiment and flows affects the indices disproportionately as more liquid names are sold first," he said.

"We own less than 2 percent of Indian stocks and would need to see a serious correction before we would consider adding, especially in light of recent issues."

Regulators worried

Banks are also distancing themselves as regulators step in, as Citigroup's wealth unit says it has stopped issuing margin loans to clients against Adani securities, and Bloomberg News reports Credit Suisse has done the same.

Although Adani Group has 2.2 trillion rupees ($26.86 billion) in gross debt, major banks said their credit exposures to the group are low. The company's shares are closely held, and mutual funds also have a low stake.

"Everyone is watching these commitments very closely," said Pankaj Pathak, fund manager at Mumbai-based Quantum Asset Management. "But on the domestic debt side, we don't see an impact on the broader corporate bond market because of what's happening at Adani," he said, citing limited holdings of those bonds.

David Chao, global market strategist at Invesco, predicts market volatility and volatility.

"We don't think there will be a default anytime soon, although I don't expect any short-term resolution between Adani Group and Hindenburg," Chao said.

Chao, however, expects the sale to help raise Indian equity valuations to "more palatable levels" for investors.

"The impact on the bigger macro picture of India is limited. I think it's ultimately a battle between two businessmen.

SOURCE: AL JAZEERA AND NEWS