The Union Cabinet has approved the listing of state-owned Export Credit Guarantee Corporation (ECGC) Ltd through the initial public offer (IPO) on the stock exchanges, Union Minister of Commerce and Industry Piyush Goyal said on Wednesday.
Through the IPO, the government will infuse Rs 4,400 crore in the public sector company. The minister made this announcement during the Cabinet briefing after a was chaired by Prime Minister Narendra Modi. The government will infuse Rs 4,400 crore in ECGC in five years from 2021-22.
Addressing the press conference, Goyal said, "The Union Cabinet has approved the listing of Export Credit Guarantee Corporation Ltd. through the IPO on the stock exchange."
"The cabinet also approved Rs 4,400 crore investment in ECGC Ltd in 5 years to provide support to exporters as well as banks," the Union minister added further.
The minister stated that the approved amount will be infused in instalments, thereby, increasing the capacity to underwrite risks up to Rs 88,000 crores and this will enable ECGC to issue covers that can support additional exports of Rs 5.28 lakh crore over the five-year period in line with the existing pattern.
Goyal also said that this move will help in creating 59 lakh new jobs including 2.6 lakh in the formal sector and ECGC could be listed on the stock exchanges by the next fiscal year.
Export Credit Guarantee Corporation was formed to promote exports by providing credit insurance services to exporters in case of non-payment by foreign buyers due to corporate and political reasons. It also provides insurance to banks against risk in the case of exporters taking loans.
With the infusion of capital in ECGC, the company will be able to expand its footprint in the export-oriented industry, especially in the labour-intensive sectors. ECGC leads the export credit insurance market in the country with 85 per cent market share. Export Credit Guarantee Corporation provides insurance to exporters on their dues. 97 per cent of its policyholders are businesses in the MSME sector.
