Centre likely to push ECGC IPO to next year amid global uncertainties

The ongoing Russia-Ukraine war and tightening of monetary policy by important central banks internationally are expected to adversely impact the valuation of ECGC if the IPO is launched now

The initial public offering (IPO) of Export Credit Guarantee Corporation of India Ltd. (ECGC) may be pushed to the next financial year due to the prevailing uncertainty in the export market conditions, the Economic Times (ET) reported.

The ongoing Russia-Ukraine war and tightening of monetary policy by important central banks internationally may have an adverse impact on the valuation of the state-run company if the IPO is brought at this time.

The Centre proposed the ECGC's public listing in September 2021. The listing that was due in 2022-23 was to bring Rs 4,400 crore into the company over a period of five-years.

At present, the Centre's focus is on divesting its stakes in IDBI Bank, NMDC Steel, Shipping Corporation of India and the Indian Renewable Energy Development Agency, the ET report said.

Commerce and industry minister Piyush Goyal had announced the cabinet's decision to bring in ECG IPO in September 2021 and asserted that the company has recorded continuous surplus along with making dividend payments to the government for two decades. Goyal expressed confidence that given its track record the ECGC's IPO will be well received in the market.

ECGC's net profit surged 90 per cent year-on-year in 2021-22 to Rs 875 crore. Its net worth increased to Rs 7,841 crore, as of March 2022, against Rs 6,365 crore a year earlier. At present, ECGC has 85 per cent share in India's export credit insurance market.

The listing would have helped ECGC to get access to fresh resources from the market and substantially improve its ability to settle claims.

Set up in 1957, ECGC offers credit insurance services to exporters against risks of non-payment by overseas buyers. The state-run company also provides insurance cover to banks against risks in export credit lending to exporters.