In this Jan 27, 2023 photo, a motorist rides past a hoarding of Adani University near the corporate headquarters of Adani Group in Ahmedabad, India. India's Adani Group said it was considering legal action against US-based short-selling firm Hindenburg Research for allegations of stock market manipulation and accounting fraud that have led investors to dump its stocks. (PHOTO / AP)

NEW DELHI – Most Adani group shares extended their sharp falls to Monday as a detailed rebuttal of a US short-seller's criticisms by the Indian conglomerate failed to pacify investors whose market losses have now risen to $65 billion over three days.

Flagship Adani Enterprises, which is facing a crucial test this week with a follow-on share offering, rose 3 percent, but was off initial gains of as much as 10 percent and significantly below the offer price.

Adani, led by Asia's richest man Gautam Adani, has locked horns with Hindenburg Research and on Sunday hit back at the short-seller's report of last week that flagged concerns about its debt levels and the use of tax havens

Adani, led by Asia's richest man Gautam Adani, has locked horns with Hindenburg Research and on Sunday hit back at the short-seller's report of last week that flagged concerns about its debt levels and the use of tax havens. Adani said it complies with all local laws and had made the necessary regulatory disclosures.

Adani Transmission and Adani Total Gas plunged 20 percent each on Monday, while Adani Green Energy was down 16 percent. Adani Ports and Special Economic Zone slipped 1.1 percent.

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Adani Enterprises' $2.5 billion secondary share sale entered its second day amid weak investor sentiment. The stock was trading at 2,848 rupees in early trade, far below the price band for the share sale of 3,112-3,276 rupees per share.

On Friday, the first day of the offer, the issue was subscribed 1 percent amid a broader fall in shares. Initial data from stock exchanges on Monday showed Adani has now received bids for 563,156 of the 45.5 million of shares, or 1.2 percent, on offer. Foreign and domestic institutional investors, as well as mutual funds, have made no bids so far in the offering, according to the data.

Indian regulations say the share offering must receive minimum subscription of 90 percent, and if it does not the issuer must refund the entire amount. Maybank Securities and Abu Dhabi Investment Authority are among investors who bid for the anchor portion of the issue.

Adani Group told Reuters in a statement on Saturday that the sale remains on schedule at the planned issue price, even as sources said bankers of the country's largest secondary share sale were considering extending the timeline beyond Jan 31, or tweaking the price due to the fall in its share price.

The Hindenburg report has led to a massive wipe-out in seven listed companies of the Adani group since last week. As of Monday, the seven listed group entities have collectively lost $65 billion in market capitalization since the report was released. Adani Total Gas lost the most, at $21 billion.

On Monday, responding to Adani's rebuttal, Hindenburg said the "response largely confirmed our findings and ignored our key questions."

READ MORE: Stocks take breather after January surge

The stock market meltdown has been a dramatic setback for 60-year-old Adani, a school-dropout who rose swiftly in recent years to become the world's third richest man, before slipping to rank eighth on the Forbes list.

Hindenburg's report said five of seven key listed Adani companies have reported current ratios, a measure of liquid assets minus near-term liabilities, of below 1 which it said suggested "a heightened short-term liquidity risk".

It said key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing" and that shares in seven Adani listed companies have an 85 percent downside due to what it called "sky-high valuations".

Adani's response on Sunday stated that over the past decade, its group companies have "consistently de-levered".