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Which of the following instruments can be used as disinvestment tools by the government?
1. Government security
2. Initial Public Offer
3. Follow Public Offer
4. Offer for Sale
Which of the statements given above is/are correct?
1 and 2 only
2 and 3 only
2, 3 and 4 only
1, 2, 3 and 4
An initial public offering (IPO) is the first time that the stock of a private company is offered to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but they can also be done by large privately owned companies looking to become publicly traded.
A follow-on public offer (FPO) is an issuing of shares to investors by a public company that is already listed on an exchange. An FPO is essentially a stock issue of supplementary shares made by a company that is already publicly listed and has gone through the IPO process.
Offer for sale (OFS) is a simpler method of share sale through the exchange platform for listed companies. The mechanism was first introduced by India's securities market regulator Sebi, in 2012, to make it easier for promoters of publicly-traded companies to cut their holdings and comply with the minimum public shareholding norms by June 2013.
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