Shares of India's Adani Group companies fell sharply on Friday as ripples from a market rout disrupted parliament for a second day, fanning fears of systemic risk after a critical research report by a US short-seller.

Seven listed Adani enterprises lost more than half their market capitalisation, which shrivelled to less than $100 billion, after the Hindenburg Research report raised questions about the conglomerate's debt levels and use of tax havens.

Investor sentiment was jolted further after the group shelved its $2.5-billion share sale on Wednesday, one of the biggest setbacks for its billionaire chairman, Gautam Adani, whose fortunes had risen rapidly in recent years.

Lawmakers have called for a wider investigation of the matter, and sources have told Reuters the central bank has asked lenders for details of exposure to the group.

Some politicians shouted slogans against Adani, an associate of Prime Minister Narendra Modi, in parliament on Friday.

"We want a joint parliamentary committee (to investigate),” they said.“Stop looting the poor.”

Adani has called the Hindenburg report baseless and said its financials remain strong, but investor sentiment has withered, bringing an unabated fall in stock prices.

Shares of the flagship company, Adair Enterprises Ltd, were down 16 per cent on Friday after earlier losing 35 per cent to their lowest level since March 2021.

The stock's new low took its losses to nearly $33.6 billion since last week, for a decline of 70 per cent.

Adani Ports and Special Economic Zone Ltd was down 2 per cent, while Adani Transmission Ltd and Adani Green Energy Ltd slumped 10 per cent each.

Adani Total Gas Ltd, a joint venture with France's TotalEnergies SE, fell 5 per cent.

In a statement, TotalEnergies said it had limited exposure from stakes in Adani companies and had not re-evaluated the stakes.

"Contagion concerns are widening, but still limited to the banking sector,” said Charu Chanana, a market strategist with Saxo Markets in Singapore. “The focus remains on further risks of index exclusions.”

On Thursday, S&P Dow Jones Indices said it would drop the Adani Enterprises flagship from widely used sustainability indices on Feb. 7, which would blunt their appeal for environment-conscious investors.

"One of the big risk factors to watch for now is if more indices remove Adani stocks,” said Chanana.“This can result in foreign outflows as funds sell Adani stocks, further aggravating confidence issues.”

Foreign investors, many already underweight on India as they consider its stock market overpriced, are reducing exposure. Adani's wipeout could spread if it triggers a bigger mood shift.

In its report, Hindenburg said key listed Adani companies had“substantial debt” while shares in seven listed firms had a downside of 85 per cent due to what it called sky-high valuations. It also alleged stock manipulation.

The Adani group said the allegation of stock manipulation had“no basis” and stemmed from ignorance of Indian law. It added that over the past decade, group companies have ”consistently de-levered”.

The seven listed Adani firms together have a market capitalisation of $113 billion, versus $218 billion before the Hindenburg report.

For Adani, a former school dropout from Gujarat, Modi's western home state, the crisis presents the biggest reputational and business challenge of his life.

The share meltdown is a dramatic turn of fortune for Adani, 60, who in recent years forged partnerships with, and attracted investment from, foreign giants as he pursued global expansion in industries from ports to power.

Adani has ceded the crown of Asia's richest person to Indian rival Mukesh Ambani of Reliance Industries Ltd as he has slid to 17th in Forbes' ranking of the world's wealthiest people. He had been third, after Elon Musk and Bernard Arnault.

The prices of US dollar bonds issued by group members edged higher on Friday after diving the previous day.

Adani Green's bonds maturing in September 2024 gained about 7 cents to 69.69 cents, off Thursday's record low of 60.56 cents.