SEBI vide its circular MRD/DoP/SE/Dep/Cir- 14 /2007 has issued guidlines on short selling.
"Short selling" is defined as selling a stock which the seller does not own at the time of trade. All classes of investors, viz., retail and institutional investors, are permitted to short sell.
Naked short selling shall not be permitted in the Indian securities market and accordingly, all investors would be required to mandatorily honor their obligation of delivering the securities at the time of settlement.
For further details on the Short Selling, please click on the following notice: