It’s Tough to Short Adani Stocks Listed in India. Here’s Why
- Low free float, high borrowing costs make shorting difficult
- Laborious to get Foreign Portfolio Investor license: Blue Orca
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Hindenburg Research’s decision to only go short on Adani Group securities outside India has highlighted the limitations of the practice in the nation and the peculiarities of the business empire itself.
India’s authorities have imposed a bevy of restrictions on short selling, including requiring institutional investors to disclose planned trades to the stock exchange before they are executed, and making their retail counterparts close positions each day. They also enforce the globally-favored ban on naked shorts, the practice where investors sell shares they haven’t borrowed first.