By Ambar Warrick 

-- Shares of the seven listed companies under Adani Group slid further on Friday after the release of a short seller report earlier this week, with a response from the Indian conglomerate doing little to curb the market rout.

(NS:) and Adani Total Gas Ltd (NS:) were the worst hit, falling 14.5% and 17.6%, respectively, while Ltd (NS:) tumbled nearly 13%. Ltd (NS:) and Ltd (NS:) lost 5% each, while Ltd (NS:) and Adani Ports and Special Economic Zone Ltd (NS:) lost 4.8% and 5.5%, respectively.

The conglomerate denied the allegations of fraud and market manipulation raised by the Hindenburg report, and said it was considering legal action against the short seller, calling the report "maliciously mischievous, and unresearched” in a statement released to Indian exchanges.

Hindenburg in turn said it welcomed the threat of legal action, inviting the conglomerate to file suit in the U.S.

“We have a long list of documents we would demand in a legal discovery process,” Hindenburg said in a statement posted on Twitter.

The 106-page report called Adani the “largest corporate con in corporate history,” and raised concerns over the conglomerate’s highly leveraged debt position, which it said .

The report also accused Adani of fraud and stock market manipulation, and claimed that Indian regulators were complicit in the fraud. 

Adani Group’s shares had plummeted on Wednesday after the release of the report, with the firm’s U.S.-listed bonds also declining. Hindenburg said it had no direct exposure to Adani shares, and had taken a short position in the firm through its U.S. bonds and other derivatives. 

The Hindenburg report came just days before Adani commenced a $2.45 billion secondary share sale. 

Selling spilled over to broader Indian markets, with both the and indexes falling 0.9% and 1.1%, respectively. Indian bank stocks bore the brunt of selling, as markets also feared a potential contagion in the sector from any losses in Adani.