Privatization involves transforming the ownership of a public sector business to the private sector known as a ‘strategic buyer’. In privatization, full ownership is transferred to the strategic partner.
In disinvestment, the same transformation process happens while retaining 26% or in some cases 51% percent of share right (i.e. the voting power) with the public sector organization.
In disinvestment 26% or 51% of share is retained with the government company and the rest is transferred to the strategic partner. Here, the ownership is not transferred to strategic buyer.
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