New Delhi, NFAPost: The union cabinet has cleared a proposal to list state-owned Export Credit Guarantee Corporation (ECGC) Ltd through the Initial Public Offer (IPO), Commerce Minister Piyush Goyal said.
The government will also invest Rs 4,400 crore in ECGC for five years to provide support to exporters as well as banks. The move is widely seen as part of efforts to boost India’s exports.
Piyush Goyal said that ECGC could be listed on the stock exchanges by next fiscal year. The move, the minister said, will help create 59 lakh new jobs including 2.6 lakh in the formal sector.
The company intends to increase its maximum liabilities (ML) to Rs 2.03 lakh crore from Rs 1.00 lakh crore by 2025-26. The government said planned capital infusion and IPO will increase ECGC’s underwriting capacity up to ₹88,000 crore and propel additional exports of ₹5.28 lakh crore over a five-year period.
“Listing may enable ECGC to mobilize fresh capital from the market either through the same IPO or subsequently through a Follow-on Public Offer (FPO) and thereby help in increasing the maximum lcover for it,” the government said in a release.
ECGC was established by the Government of India under Companies Act in 1957 to promote exports by providing credit insurance services to exporters against non- payment risks by the overseas buyers due to commercial and political reasons. It also provides insurance covers to banks against risks in export credit lending to the exporter borrowers.
“ECGC endeavours to support the Indian export industry with its experience, expertise and underlying commitment to progress and advance of India’s exports,” the government added. The cabinet has also given its nod to infuse ₹1,650 crore in National Export Insurance Account scheme.
Further, the Cabinet paved way for doubling of Nimach-Ratlam railway line at a total estimated cost of Rs 1,095.88 crore and Rajkot-Kanalus railway line at a total estimated cost of Rs 1,080.58 crore.