Hindenburg Research’s revelation of a short position in Adani Group has left competing US investors puzzled. With Indian security rules being stringent against foreign investors betting against companies there, US investors wanted a closer look at the mechanics of the trade.

So far, Hindenburg’s stance has worked out in their favor, and the Indian conglomerate has denied the allegations against them. In the turn of events, more than $80 billion of Adani’s market value has been wiped out and knocked billionaire Gautam Adani from his perch as the world’s third-richest man. Adani’s nosedive has given Hindenburg a chance to profit “through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities,” however they have not revealed much about the size of bets or kind of derivatives and reference securities utilized.

Short sellers like Hindenburg usually build positions discretely before unveiling their position about the company to maximize profits. Discretion is key because their involvement in the stock is sometimes sufficient for the shares to start dropping. However, an expected twist has made the case more intriguing. The securities rules and regulations in India do not support building positions discretely. Institutional investors are required to be upfront about their short positions, and foreign investors have other restrictions and registration requirements. Further adding to the complications, Adani Group’s shareholding lies firmly in the hands of the Adani family, and its shares do not trade on exchanges abroad.

Hindenburg founder Nathan Anderson has been tight-lipped about the bet against Adani. Getting word of how Hindenburg made the trade with Adani could lead to more foreign companies taking positions against Indian companies. Left and Carson Block, the founder of Muddy Waters Research and another prominent short seller, told Reuters that they got a single-word response, ‘thanks’ to messages of congratulations they sent to Anderson when usually they would talk shop.

“Once these things (short-seller attacks) begin there are others who could be looking,” said Amit Tandon, managing director of proxy and governance firm Institutional Investor Advisory Services (IIAS) in India.

Much has not been unearthed regarding Hindenburg’s trade, but several investors familiar with trading with Indian securities claim that the short seller would profit more from the derivative trades Hindenburg had placed.

In the days after Hindenburg’s reports were released, some of Adani’s US dollar corporate bonds fell 15-20 cents, making the bet profitable. Still, there remain limits because only a few billion dollars of bonds in total were outstanding, and they were not easily available to borrow. The more profitable way, noted here, would involve placing the bet via P-notes or participatory notes.

The entities that create P-notes are registered with the Indian stock market regulator, but anyone can invest in them without registering with SEBI. Also, an investor can further use intermediaries to obscure its position. Besides, the market for P-notes is large, and billions of dollars worth of P-notes are traded yearly, making it possible to place large bets.