Mint Explainer: How short selling works and why it hasn't picked up in India
- Poor liquidity in stock lending & borrowing mechanism; tough to short stocks outside F&O
The report by Hindenburg Research on the Adani Group has thrown the spotlight on short selling. Short selling is legal in India, but there are various barriers for funds (including hedge funds) who want to short-sell. This has prevented the growth of active short sellers such as Hindenburg Research in India.