New Delhi : The Union Cabinet on Wednesday approved a proposal for capital infusion of ₹4,400 crore in Export Credit Guarantee Corporation of India Ltd ( ECGC) and its listing in the stock market through Initial Public Offer (IPO).
The government will infuse Rs.4400 crore in ECGC over a period of 5 years i.e. from FY 2021-2022 to FY 2025- 2026. Out of which Rs.500 crore will be infused immediately. The move will help create 59 lakh new jobs including 2.6 lakh in the formal sector, said union Commerce Minister Piyush Goel.
The listing of ECGC is likely to happen next year.
“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 Liability cover for it” said a government 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.
ECGC plays a wider role in supporting exports from labour-intensive sectors and encourage bank lending to enterprises of small exporters thereby leading to their revival. Capital infusion in ECGC will enable it to expand its coverage to export oriented industry particularly labour-intensive sectors. The approved amount will be infused in instalments thereby increasing the capacity to underwrite risks up to ₹88,000 crore and this will enable ECGC to issue covers that can support additional exports of ₹5.28 lakh crore over the five-year period in line with the existing pattern.