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Public sector Vs Private sector

public sector

In economics and business, the terms “public sector” and “private sector” are frequently used to describe different spheres of activity. Understanding the distinctions between these sectors is crucial for comprehending how various organizations operate and their role in society. This article aims to comprehensively explore the public and private sectors, their meanings, examples, and the fundamental disparities between them.

Public Sector Meaning and Examples

Definition and Overview

The public sector refers to the part of the economy owned, controlled, and operated by the government. It includes government agencies, public institutions, and organizations responsible for providing essential services and ensuring the public’s welfare.

Key Characteristics

  1. Government Ownership: The public sector is predominantly owned and funded by the government at different levels, such as federal, state, and local.
  2. Public Interest Focus: The primary objective of the public sector is to serve the public interest by providing services that benefit society as a whole.
  3. Non-Profit Orientation: Public sector entities are generally not driven by profit motives. Instead, they aim to allocate resources efficiently and ensure equitable distribution of services.
  4. Democratic Accountability: Public sector organizations are accountable to the public and operate within the framework of democratic governance.

Examples of Public Sector Organizations

  1. Government Agencies: The Department of Education, Environmental Protection Agency, and National Aeronautics and Space Administration (NASA) are part of the public sector.
  2. Public Schools and Universities: Educational institutions that are funded and operated by the government fall under the public sector.
  3. Public Healthcare Facilities: Hospitals, clinics, and healthcare centers that provide medical services to the general public are typically part of the public sector.
  4. Police and Fire Departments: Agencies responsible for maintaining law and order and ensuring public safety are examples of the public sector.

Private Sector Meaning and Examples

Definition and Overview

In contrast to the public sector, the private sector encompasses businesses, organizations, and industries owned and operated by private individuals or entities. These entities aim to generate profits and serve the needs and demands of consumers.

Key Characteristics

  1. Private Ownership: Private sector entities are owned by individuals, shareholders, or privately held corporations.
  2. Profit-Driven: The primary objective of the private sector is to maximize profitability and generate returns for owners and investors.
  3. Competitive Environment: Private sector organizations operate in a market-driven economy, where competition significantly shapes their strategies and performance.
  4. Entrepreneurial Spirit: The private sector fosters innovation, entrepreneurship, and risk-taking to drive economic growth and development.

Examples of Private Sector Organizations

  1. Corporations: Companies like Apple, Microsoft, and Coca-Cola are examples of private sector entities that manufacture and sell products or services to consumers.
  2. Small and Medium Enterprises (SMEs): Local businesses, such as family-owned restaurants, retail stores, and consulting firms, are part of the private sector.
  3. Banks and Financial Institutions: Private sector banks, investment firms, and insurance companies operate intending to generate profits from financial services.
  4. Technology Startups: Innovative startups like Airbnb, Uber, and SpaceX are privately owned enterprises that disrupt traditional industries with new business models and technologies.

Conclusion

Understanding the distinctions between the public and private sectors is crucial for comprehending how different organizations function and contribute to society. The public sector, owned and operated by the government, focuses on serving the public interest and providing essential services. In contrast, the private sector, owned by individuals or private entities, operates with profit motives in a competitive market. Both sectors play vital roles in driving economic growth and societal development.

By grasping the nuances of these sectors, individuals can make informed decisions about their careers, investments, and interactions with various organizations. Whether it is the public sector’s emphasis on public welfare or the private sector’s drive for profitability and innovation, the two sectors coexist, complementing each other in their contributions to society’s overall well-being.

What are the main differences between the public and private sectors?

The government owns and controls the public sector, focusing on serving the public interest and providing essential services. On the other hand, the private sector is owned by individuals or private entities and operates with profit motives in a competitive market.

What are some examples of public sector organizations?

Public sector organizations include government agencies like the Department of Education, the Environmental Protection Agency, and NASA. Public schools, universities, public healthcare facilities, and police and fire departments are examples of the public sector.

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How does the private sector differ from the public sector regarding ownership?

The private sector is owned by individuals, shareholders, or privately held corporations, whereas the public sector is predominantly owned and funded by the government at different levels, such as federal, state, and local.

What is the primary goal of the private sector?

The primary goal of the private sector is to maximize profitability and generate returns for owners and investors by offering products and services that meet consumer needs and demands.

Can public sector organizations be profitable?

While the primary focus of the public sector is not profit generation, some public sector organizations can generate revenue through fees, taxes, or other sources. However, their main objective is to provide public services rather than maximize profits.

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Essen Speciality Films Limited’s Initial Public Offering to Commence on June 23, 2023, and Conclude on June 27

Essen

Essen Speciality Films Limited, a company that manufactures sustainable plastic products, is set to launch its Initial Public Offering (IPO) on June 23, 2023, with the subscription period closing on June 27, 2023. Established in 2002, Essen Speciality Films Limited is known for its compliance with various Indian and international regulations, setting it apart from other companies in India.

The IPO of Essen Speciality Films Limited amounts to Rs. 66.33 crores and will involve a fresh issue of up to 46,99,200 equity shares. The shares will be offered at a price band of Rs. 101 to Rs. 107 per equity share. Retail investors must subscribe to a minimum of 1 lot, which consists of 1,200 shares.

Essen Speciality Films Limited manufactures sustainable plastic products for the Home Decor and Home Furnishing Industry. The company exports its products to 24 countries, serving various Fortune 500 Retailers. Per the prospectus filed with NSE Emerge, the IPO will offer 61,99,200 equity shares at a price band of Rs. 101 to Rs. 107 per Equity Share, including a premium of Rs. 97 per Equity Share. The funds raised through the IPO, totaling Rs. 66.33 crores, will be allocated for different purposes. Rs. 29.00 crores will be utilized as additional working capital for the company’s future growth requirements, Rs. 3.54 crores will go towards prepayment or repayment of certain outstanding borrowings, and Rs. 16.05 crores will be utilized for an offer for sale.

The Book Running Lead Manager for the IPO is GYR Capital Advisors Private Limited. Essen Speciality Films Limited is certified as a supplier to modern multinational trade and Fortune 500 retailers, highlighting its reputation and credibility in the market. The company caters to various product categories, including Bath Essentials, Kitchen & Dining, Home Decor, Storage & Organization, Fitness & Lifestyle, and Outdoor & Utility, offering a comprehensive range of sustainable plastic products. These products are certified by globally recognized certifications such as Global Recycled Standard, Recycled Claim Standard, Forest Stewardship Council, and OEKO-TEX (standard 100), ensuring their adherence to international standards.

Export sales contribute approximately 78% of Essen Speciality Films Limited’s total sales, while domestic sales comprise the remaining 22%. The company is well-positioned to capitalize on the growing demand for polypropylene, driven by increasing urbanization, disposable income, and the rising importance of decorative and recycled plastic for sustainability. The Indian polypropylene market witnessed a compound annual growth rate (CAGR) of around 8.51% from 2015 to 2019, and it is expected to continue growing at a healthy rate from 2022 to 2030. Additionally, the global plastic market is projected to grow by $19,683.57 million during 2021-2025, with a CAGR of 5.73% during the forecast period, as stated in the report “Global Plastic Market 2021-2025.”

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Pallav Doshi, the Chairman and Whole Time Director of Essen Speciality Films Limited, emphasizes the company’s commitment to sustainability and innovation. Their state-of-the-art manufacturing unit supports the development of new and innovative products, enabling them to provide sustainable plastic solutions for the Home Furnishing and Home Decor industry. Essen Speciality Films Limited aims to strengthen its marketing network, expand its product portfolio, maximize economies of scale, and increase its global presence, positioning itself for sustainable growth in the years to come.

Necessary details about the Essen Speciality Films Limited IPO are as follows:

Issue Dates: The IPO will open for public subscription on June 23, 2023, and will close on June 27, 2023. The basis of share allotment will be determined on July 03, and the refund process will commence on July 04, 2023. Shareholders will have their shares credited to their Demat accounts on July 05, 2023. Finally, the Essen Speciality Films Limited shares will be listed on the NSE Emerge platform on July 06, 2023.

Price Bands: The price range for the IPO shares is Rs. 101 to Rs. 107 per equity share.

Issue Size: The IPO of Essen Speciality Films Limited amounts to Rs. 66.33 Crores.

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IPO Share Reservations: The allocation of shares for the IPO follows specific guidelines. A maximum of 50% of the Net Issue will be allocated proportionately to Qualified Institutional Buyers (QIBs), including anchor investors. Non-Institutional Investors will also receive at least 15% of the Net Offer on a proportionate basis. Retail Individual Investors will have access to at least 35% of the Net Offer, ensuring broader participation.

Lot Size: The market lot size for this IPO is 1200 equity shares.

For retail investors, the minimum investment required for one lot will range from Rs. 1,21,200 (Lower band) to Rs. 1,28,400 (Upper band).

IPO Key Intermediaries: GYR Capital Advisors Pvt. Ltd. is appointed as the Book Running Lead Manager for the IPO, overseeing the process. Additionally, Bigshare Services Pvt. Ltd. has been designated as the Registrar to the Offer, facilitating the IPO proceedings.

Investors interested in participating in the Essen Speciality Films Limited IPO should take note of the important dates, price bands, and share allocation details. The company’s strong focus on sustainability, compliance with global standards, and its presence in the growing market for plastic products position it for long-term growth and success. With its expansion plans, marketing strategies, and commitment to innovation, Essen Speciality Films Limited aims to solidify its position in the industry and capitalize on the increasing demand for sustainable plastic solutions.

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