Warehousing method of disinvestment refers to __________.

government selling part of its shares in one PSU to other PSUs.

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government selling shares of PSUs to public sector financial institutions and banks.

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government's own financial institutions buying government's stake in select PSU's and holding them until any third buyer emerges.

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none of the above.

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Solution

The correct option is B government's own financial institutions buying government's stake in select PSU's and holding them until any third buyer emerges.
Warehousing method or Cross holding method of Disinvestment refers to Government selling part of its Shares in one PSU to other PSUs. The term disinvestment is more popularly used where central/ state government sells its holdings of public sector companies. Disinvestment means selling of Public investment to a Private entrepreneur.

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Similar questions

Q. Government's own Financial Institutions buying Government's stake in select PSU's and holding them until any third buyer emerges is called as ______________.

Act of selling a part or the whole of shares of selected public sector undertakings (PSU) held by the government to generate capital receipts is called _______.

Q. Select the correct matching

(A) Liberalization	(1) Refers to partial or full transfer of ownership and control of PSUs to the private sector.
(B) Privatization	(2) Refers to relaxation of government's restriction in the scope of economic and social polices.
(C) Disinvestment	(3) Refers to a method of privatization, whereby part of shareholdings of a PSU is sold to the private sector.

Government of India's Disinvestment Policy was recast in 2000 to provide for 'strategic sale' of PSU shares. The new policy involves:

Q. Many times we read in newspapers that a company is planning to bring a public issue. What does it mean?
A. Shares of the company will be issued only through public sector organisations like banks/Central financial institutions etc.
B. Shares of the company will be issued to general public only through primary market.
C. This means some stakeholders/promoters are willing to leave the company. Hence they wish to sell their stock to the general public.

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