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What is short selling? MintGenie explains

The impact of a critical report made by Hindenburg Research against the Adani Group on stock market was immediate and massive.  

Short selling involves investors borrowing shares and selling them, expecting to buy them back later at a lower price before returning them to the lenders.

SEBI has indicated to the Supreme Court that it is not in favour of banning short-selling or sale of borrowed shares.

Short selling allows investors to make profits in bear markets, provides portfolio diversification, enhances liquidity, and helps to identify overvalued stocks.

Securities market regulators in most countries, particularly in all developed securities markets, recognise short selling as a legitimate investment activity.

India follows the policy of regulated short selling and has framed its regime accordingly.

During turbulent times such as at the start of the Covid pandemic when Nifty fell by around 26 per cent in 13 trading days in March 2020, Sebi did not ban short selling despite demand.  

Short selling provides liquidity and also helps price corrections in overvalued stocks.

SEBI is currently investigating allegations made by a tiny short-seller against the Adani Group as well as its share price movements.

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Adani-Hindenburg saga: What is short selling? MintGenie explains

Short selling is an investment activity that involves borrowing and selling shares in order to make profits from the difference between the higher sale price initially and the lower purchase price subsequently. It is a legal activity in India and is regulated by SEBI.

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Adani-Hindenburg saga: What is short selling? MintGenie explains

Short selling is an investment activity that involves borrowing and selling shares in order to make profits from the difference between the higher sale price initially and the lower purchase price subsequently. It is a legal activity in India and is regulated by SEBI.

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