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Indian shares declined on Monday, with all 10 Adani group stocks dropping after U.S. short-seller Hindenburg Research alleged the head of the country's markets regulator held a stake in offshore funds used by the group.

The NSE Nifty 50 index was down 0.31% at 24,291.55, as of 10:18 a.m IST, and the S&P BSE Sensex shed 0.25% to 79,504.47.

Over the weekend, U.S.-based Hindenburg alleged that Madhabi Puri Buch, the head of the Securities and Exchange Board of India, previously held investments in offshore funds also used by the Adani Group. Buch denied the allegations, while SEBI asked investors to remain calm and exercise due diligence.

The Adani group stocks fell between 1% and 7%. The two Nifty constituents -- Adani Enterprises and Adani Ports -- fell 3.3% and 2.5%, respectively, the most on the benchmark.

Analysts said the decline in the Adani stocks and the broader market was unlikely to sustain and expect the Nifty to hold 24,000 levels and recover in a few sessions.

"(The) Indian markets have shown only a muted reaction ... (and) the drop in benchmarks is not much," said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.

"Adani stocks are under pressure on the day. But this is a temporary, knee-jerk reaction. Ultimately, the stocks won't react the way they did last year unless there are further follow-up allegations with serious merit."

Still, eleven of the 13 major sectors logged losses and 36 Nifty 50 stocks dropped. The broader, small- and mid-caps shed 0.1% and 0.4%, respectively.

Among individual stocks, Bharat Dynamics tumbled 9% after reporting a lower quarterly profit.

Ola Electric Mobility surged 16%, adding to the 20% surge in its trading debut on Friday.