Shares in India's Adani Group rallied on Tuesday a day after it prepaid some loans, bringing relief to investors that have seen $113.6 billion wiped off the conglomerate's market value since a U.S. short-seller published a critical report two weeks ago.

The group, led by billionaire Gautam Adani, has been roiled by days of market turmoil after Hindenburg Research on Jan. 24 alleged it had engaged in stock manipulation and used tax havens. It also said the group had unsustainable debt.

Adani Group has denied the allegations, saying it complies with all laws and has made necessary disclosures over time. Nonetheless, investors dumped its shares as concerns of financial contagion grew.

Moody's rating agency has warned the share-price plunge could hit the group's ability to raise capital, while India's central bank has started checking on lenders' exposure to it.

In a major setback for the billionaire, the market rout also forced Adani to shelve a key $2.5 billion share sale last week.

On Monday though, Adani Group said it will pre-pay $1.11 billion of loans on shares. Separately, JPMorgan on Tuesday said the group companies were still eligible for inclusion in the bank's bond indexes.

Anita Gandhi, director at Arihant Capital Markets, said those two factors had helped lift stock prices. "Also aiding the rise is the sharp correction in the group stocks, which have made them attractive," she added.

The group's flagship company Adani Enterprises Ltd was trading 14.7% higher on Tuesday, but still around half the level seen before the Hindenburg report was released.

The cumulative losses of Adani group's seven listed companies still stand at $109 billion despite Adani Ports and Special Economic Zone also gaining 2.6% on Tuesday and Adani Wilmar adding 5%.

The recovery didn't reach Adani Green Energy, Adani Total Gas Ltd or Adani Power, all of which were 5% lower on the day.

After hundreds of members of India's main opposition Congress party took to the streets on Monday pressing for a probe into Hindenburg's allegations, dozens of activists from its youth wing gathered outside the Life Insurance Corporation's office in New Delhi on Tuesday, carrying posters questioning why investigating agencies have remained silent.

Many Adani group companies report results this week. Adani Ports posted a lower quarterly profit on Tuesday as foreign exchange losses soared, and said it will pay back 50 billion rupees ($605 million) - or 13% of its net debt - in the new fiscal year from April.

Indian tycoon Gautam Adani, who has seen his personal wealth halve, insists the fundamentals of his company are 'very strong'
AFP