Adani Enterprises, the flagship of the Indian conglomerate Adani Group, called off its $2.5 billion share sale on Wednesday, citing “market volatility,” a blow to the company and its billionaire founder, Gautam Adani, as it struggles to overcome a plunge in value set off by fraud allegations made by a New York investment firm last week.

The announcement came after shares in Adani Enterprises fell sharply on Wednesday, wiping billions of dollars from its market valuation and pushing its price well below the range it offered to investors in the sale. The sale closed on Tuesday and was fully subscribed by investors including state-led institutions like Abu Dhabi’s International Holding Company and funds controlled by the State Bank of India.

Adani Enterprises said in a statement that it would withdraw the transaction and return the money.

“Despite the volatility in the stock over the last week, your faith and belief in the company, its business and its management has been extremely reassuring and humbling,” Mr. Adani said in the statement. “However, today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct.”

Other Adani Group companies, including Adani Green Energy and Adani Total Gas, have also fallen sharply in recent trading. Shareholders in these companies have seen more than $90 billion in market value wiped out since the New York-based investment firm, Hindenburg Research, accused the group of running “a brazen stock manipulation and accounting fraud scheme”in part by relying heavily on offshore tax shelters.

Hindenburg is what’s known as a short seller, an investor that profits from investments when a company’s share price falls. The Adani Group has dismissed the allegations, and called Hindenburg’s report a “calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”

This is a developing story. Check back for updates.