1. O

FFER FOR SALETO

P

UBLIC

AT

FIXED

PRICE

:

In this type of disinvestment, thegovernment holds the sale of the equity shares to the public at large at a pre determined price.Examples:-MFIL, BALCO, CMC, HTL, IBP, HZL, PPL, and IPCL.

2. S

TRATEGIC

SALE

:

In this type, significant management rights are transferred to theinvestor i.e. majority of equity holdings are divested. Examples: -Offer of 1 million shares of VSNL, listing of ONGC IPO.

3. I

NTERNATIONAL

OFFERING

:

This is essentially targeted at the FII (foreign institutionalinvestors). Ex:-GDR of VSNL, MTNL etc.

4. A

SSET

S

ALE

AND

W

INDING

UP

:

This is normally resorted to in companies that are either sick or facing closure. This is done by the process of auction or tender. Ex:-Auction of sick PSU’s.

O

BJECTIVES

OF

D

ISINVESTMENT

:

Privatization intended to achieve the following:

•

Releasing large amount of public resources

•

Reducing the public debt

•

Transfer of Commercial Risk

•

Releasing other tangible and intangible resources

•

Expose the privatised companies to market discipline

•

Wider distribution of wealth

•

Effect on the Capital Market

•

Increase in Economic Activity

D

ISINVESTMENT

P

ROCESS

:M

ETHODS

ADOPTED

IN

I

NDIA

:

FMG 18 B, GROUP-IVPage 19