Union Cabinet approved listing of ECGC IPO; investment of Rs. 4,400 crores in next 5 years
Union Cabinet has approved the listing of state-owned Export Credit Guarantee Corporation (ECGC) Ltd through the Initial Public Offer (IPO) on the Stock Exchange and also approved Rs. 4,400 crores investment in ECGC Ltd in next 5 years.
The Union Minister for Commerce and Industry Piyush Goyal informed on September 29, 2021, that 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 Exchange.
The Union Minister, while addressing the press conference, said that the Union Cabinet has also given its approval to Rs. 4,400 crores investment in ECGC Ltd in next 5 years starting from 2021-22. The step has been taken to provide support to the exporters and the banks.
Piyush Goyal also said that the infusion of Rs. 500 crores will be done immediately and that the listing of the Export Credit Guarantee Corporation (ECGC) is most likely to happen in 2021.
Interacted with media on Cabinet decisions to boost exports.— Piyush Goyal (@PiyushGoyal) September 29, 2021
MSME sector will gain immensely from the decision to allow capital infusion into Export Credit Guarantee Corporation & National Export Insurance Account in the next 5 years.#ExportsSeVikas
🎥 https://t.co/5YL3CsT3xs pic.twitter.com/kV5Kz5FDmD
The Minister for Commerce and Industry while talking about the latest decision of the Union Cabinet said that the move of approving the listing of ECGC IPO and the announcement regarding the investment of Rs. 4,400 crores will help in creating 59 lakh new jobs which will include 2.6 lakh in the formal sector.
With the latest decision by the government, ECGC can also be listed on the Stock Exchanges by the next fiscal year.
• Goyal informed that the approved investment of Rs. 4,400 crores in ECGC Ltd. will be infused in installments.
• It will increase the capacity to underwrite the risks up to Rs. 88,000 crores. This will further enable the Export Credit Guarantee Corporation (ECGC) to issue the covers that can support an additional export of Rs. 5.28 lakh crores over the 5-year period in line with the existing pattern.
• The announced capital infusion in ECGC will also enable it to expand its coverage to export-oriented industry particularly the labor-intensive sectors.
Continuation of NIEA Scheme approved:
The Union Cabinet chaired by Prime Minister Modi also gave its approval to the continuation of the National Export Insurance Account (NEIA) scheme as well as the infusion of Rs. 1,650 crores Grant-in-Aid over 5 years.
The capital infusion in NEIA by the government will help tag the huge potential of the project exports in the focus market.
About state-owned ECGC
The Export Credit Guarantee Corporation was established by the Indian Government under the Companies Act in 1957. It aims at promoting exports by providing credit insurance services to the exporters against the non-payment risks by the overseas buyers due to commercial and political reasons.
ECGC also provides insurance covers to the banks against the risks in export credit lending to the exporter borrowers. The state-owned ECGC is a market leader with around 85% market share in the export credit insurance market in India.