wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Q17. Consider the following statements:

1. A majority disinvestment is one such that, at the end of it, the government retains a majority stake in the company, typically greater than 51%, thus ensuring management control.

2. A minority disinvestment is one in which the government, post disinvestment, retains a minority stake in the company i.e. it sells off a majority stake.

Which of the above statements are correct?


A

(a) 1 only

No worries! We‘ve got your back. Try BYJU‘S free classes today!
B

(b) 2 only

No worries! We‘ve got your back. Try BYJU‘S free classes today!
C

(c) Both 1 and 2

No worries! We‘ve got your back. Try BYJU‘S free classes today!
D

(d) Neither 1 nor 2

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
Open in App
Solution

The correct option is D

(d) Neither 1 nor 2


Disinvestment:

1. When Government sells its shares of a PSU, to Private Sector Company / individual.

Minority Disinvestment

1. A minority disinvestment is one such that, at the end of it, the government retains a majority stake in the company, typically greater than 51%, thus ensuring management control.

  • Historically, minority stakes have been either auctioned off to institutions (financial) or offloaded to the public by way of an Offer for Sale.
  • Minority sales via Offer for Sale include recent issues of Power Grid Corp. of India Ltd., Rural Electrification Corp. Ltd., NTPC Ltd., NHPC Ltd. etc.

Majority Disinvestment

1. A majority disinvestment is one in which the government, post disinvestment, retains a minority stake in the company i.e. it sells off a majority stake.

  • Historically, majority disinvestments have been typically made to strategic partners.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Privatisation and Globalisation
ECONOMICS
Watch in App
Join BYJU'S Learning Program
CrossIcon