The flagship company of the Indian multinational conglomerate Adani Group confirmed that the US$2.5bn raised from the sale would be returned to investors following the 26% drop in share value, report said.

The Adani Group was founded by Gautam Adani in 1988 as a commodity trading business and its companies include Adani Wilmar, a joint venture with leading Singapore agribusiness Wilmar International and a major producer of edible oils in India.

After the market closed, the group said on 1 February that it would return the share sale proceeds due to “the unprecedented situation and the current market volatility”.

“Given these extraordinary circumstances, the company's board felt that going ahead with the issue would not be morally correct,” founder Gautam Adani was quoted as saying.

“The interest of the investors is paramount and hence to insulate them from any potential financial losses, the board has decided not to go ahead with the FPO (follow-on public offer).”

Mr Adani was listed as the world’s third richest man less than two weeks ago, the BBC wrote, and shares of Adani Enterprises were due to go on sale on 25 January.

However, a day before that, US investment firm Hindenburg Research accused the group of stock manipulation and accounting fraud.

The BBC said Hindenburg specialised in ‘short-selling’ (betting against a company's share price in the expectation that it will fall) and the Adani group described Hindenberg’s report as "a malicious combination of selective misinformation and stale, baseless and discredited allegations", but that was not enough to stem investor fears.

Mr Adani said the company’s balance sheet was “very healthy with strong cashflows and secure assets”.

“We have an impeccable track record of servicing our debt.” The decision to return the money raised from its sale would not have any impact on existing operations and future plans, he added.

Adani Enterprises has operations in a wide range of industries including commodities trading, airports, utilities and renewable energy.

Adani Wilmar is a market leader in food and edible oils in India. Its edible oil products, include soyabean, palm, sunflower, rice bran, mustard, groundnut, cottonseed and blended oils, vanaspati and specialty fats. It also produces oleochemicals, including stearic acids, soap noodles, palmitic acid, oleic acid and glycerine for home and personal care products including soaps, detergents, cosmetics, polymers and pharmaceuticals. Its flagship edible oil brand Fortune is the largest selling product of its type in India, according to the company’s website.

As well as edible oils, Adani Wilmar also supplies pulses, rice, sugar and wheat flour.