ECGC IPO likely to hit market in fourth quarter of FY23: CMD
ECGC Ltd.’s Chairman-Cum-Managing Director (CMD) M Senthilnathan on July 26 said the table of the import credit agency on the stock exchange is likely to be in the last quarter of the current financial.
Last time, the government had said that it would start the process to list the state- possessed reality soon, and the original Public Offering (IPO) would hit the request during the coming fiscal time.
According to Senthilnathan, the Department of Investment and Public Asset Management (DIPAM) had mentioned that the table of ECGC will be after the IPO of Life Insurance Corporation of India (LIC).
“The original review of ECGC has been done by DIPAM and the coming direction is anticipated from them. originally, we were told that the table will be nearly around the last quarter of the current fiscal time. So, I suppose they will be on time,” Senthilnathan told journalists.
ECGC Ltd is a wholly- possessed central public sector enterprise set up with the ideal of perfecting the competitiveness of exporters by furnishing them credit threat insurance and related services for exports. The state- possessed reality on July 26 introduced a new scheme to give enhanced import credit threat insurance cover to the extent of 90 per cent to support small exporters under the Export Credit Insurance for Banks Whole Development Packaging Credit and Post Shipment (ECIB- WTPC & PS).
The scheme is anticipated to profit a number of small- scale exporters serving of import credit with banks which hold the ECGC WT- ECIB covers. It’ll enable the small exporters to explore new requests new buyers and diversify their being product portfolio competitively.
“We anticipate this to bring up the chance of accounts with over to Rs 20 crore, thereby advancing farther stability to the ECGC portfolio,” Senthilnathan said.” By giving 90 per cent cover to banks, we anticipate more small companies to get import credit from banks, serving this diligence greatly. We anticipate banks to give further concessions. The net effect will be a benefit to exporters, involving a reduction in interest rate,” he said.
This new scheme will enable the banks holding ECGC’s WT- ECIB cover to explore the possibility of reducing interest rates further. This new scheme will enable the banks holding ECGC’s WT- ECIB cover to explore the possibility of reducing interest rates further.
The enhanced cover chance shall be made available to State Bank of India as per the former time’s decoration rate in view of its favorable claim decoration rate, a release said. still, for other banks there may be a moderate increase in the prevailing decoration rates, it said.
The enhanced cover shall be available for manufacturer- exporters serving fund- grounded import credit working capital limit up to Rs 20 crore, banning the gems, jewelry and diamond sector and trafficker exporters, the release said.
ABOUT US – ECGC LTD
ECGC Ltd. (Formerly Export Credit Guarantee Corporation of India Ltd.), wholly owned by Government of India, was set up in 1957 with the objective of promoting exports from the country by providing Credit Risk Insurance and related services for exports. It functions under the administrative control of Ministry of Commerce & Industry, and is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, and insurance and exporting community. Over the years it has designed different export credit risk insurance products to suit the requirements of Indian exporters and commercial banks extending export credit.
ECGC is essentially an export promotion organization, seeking to improve the competitiveness of the Indian exporters by providing them with credit insurance covers. ECGC keeps its premium rates at the optimal level.
What does ECGC do?
- Provides a range of credit risk insurance covers to exporters against loss in export of goods and services
- Offers Export Credit Insurance covers to banks and financial institutions to enable exporters to obtain better facilities from them
- Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan
How does ECGC help exporters?
ECGC Offers insurance protection to exporters against payment risks.
- Provides guidance in export-related activities.
- Makes available information on different countries with it’s own credit ratings.
- Makes it easy to obtain export finance from banks/financial institutions.
- Assists exporters in recovering bad debts.
- Provides information on credit-worthiness of overseas buyers.
Need for export credit insurance
Payments for exports are open to risks even at the best of times. The risks have assumed large proportions today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring about the same result.
Economic difficulties or balance of payment problems may lead a country to impose restrictions on either import of certain goods or on transfer of payments for goods imported. In addition, the exporters have to face commercial risks of insolvency or protracted default of buyers. The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and economic uncertainties. Export credit insurance is designed to protect exporters from the consequences of the payment risks, both political and commercial, and to enable them to expand their overseas business without fear of loss.