Short selling on Indian stock markets is likely to be investigated in the coming days by SEBI, the market regulator.
According to sources, short sellers’ role in bringing the market down will be investigated because Indian markets have been hit hard in recent trading sessions.
One of the long-standing market practices that has frequently been the subject of considerable debate and divergent viewpoints in the majority of securities markets worldwide is short selling, which is the sale of a security that the seller does not own, according to a SEBI discussion paper.
Short-selling supporters see it as a desirable and necessary aspect of a securities market. On the other hand, those who oppose short selling are persuaded that, either directly or indirectly, short selling can quickly destabilize the market.
Cash-and-carry arbitrage and reverse cash-and-carry arbitrage control the relationship between the underlying asset’s spot price and futures price in an efficient futures market. The latter necessitates that traders be able to sell the underlying security shortly, unless, of course, there are sufficient traders who own the security and are able to sell it cash in order to profit from an excessively low futures price.
The fact that securities market regulators in the majority of nations, and in particular in all developed securities markets, recognize short selling as a legitimate investment activity is noteworthy despite the divergent schools of thought. Additionally, there is a thriving market for stock futures and other equity derivatives in these jurisdictions. In some cases, some jurisdictions even recognize the value of naked short sales and, as a result, do not prohibit them; It has been allowed to take place within a controlled setting by the regulators.
Short selling and securities lending practices in all markets have been examined by the International Organization of Securities Commissions (IOSCO), which has recommended transparency rather than prohibition.
According to reports in the media, in a vast investigation into hedge funds and research firms that bet against stocks, US prosecutors considered racketeering charges in 2022.
According to media reports, the extensive investigation into potentially manipulative trading based on negative reports on listed companies published by some of their investors resulted in the US Justice Department issuing subpoenas to dozens of businesses.
Adani Gathering has said in a proclamation that bookkeeping (or misrepresentation type declarations) “examination” by Hindenburg is without any trace of reality. Eight of the nine publicly traded companies in the Adani portfolio are audited by one of the Big 6.
Adani Enterprises stated in a stock exchange filing that on the issue of leverage or excessive leverage, all of our various companies are rated and account for nearly 100 percent of our EBITDA.
Adani Group stated that six of the nine listed companies in the Adani portfolio are subject to specific sector regulatory review for revenue, costs, and capital expenditures.
In terms of governance, four of our large businesses rank among the top 7% of their peers in Emerging Markets, the industry, or the world. The group stated that the LAS position should be noted that promoter leverage is less than 4% of promoter holding.
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