Economy / Public Sector - Evolution, Reforms and Performance / Methods of Disinvestment of Minority Stake in CPSES.
Methods of Disinvestment of Minority Stake in CPSES.
- Initial Public Offering (IPO):
- The government offers shares of an unlisted Central Public Sector Enterprise (CPSE) to the public for subscription for the first time.
- Further Public Offering (FPO):
- The government offers additional shares of a listed CPSE to the public for subscription.
- Offer for Sale (OFS):
- Promoters sell shares through the stock exchange mechanism, auctioning them to institutional investors. This method has been extensively used by the government since 2012.
- Strategic Sale:
- Sale of a substantial equity stake, often a controlling interest, to a strategic partner.
- CPSE Exchange Traded Fund (ETF):
- Bundling shares of multiple CPSEs into an Exchange-Traded Fund, which is then listed on the stock exchange.
- Cross Holdings:
- State-owned companies purchase shares of one another, creating crossholdings for collaborative purposes.
