These factors may have an adverse impact on the valuation of the company, which commands an 85% share in India’s export credit insurance market, if the IPO is rushed, they said.
In September 2021, the government had proposed the public listing of ECGC in 2022-23 to “unlock its true value” and to infuse Rs 4,400 crore into the company over a five-year period.
Given that the government is proceeding with disinvestment in several companies, the IPO of ECGC has to be appropriately timed, said one of the persons, whodid not wish to be identified.
“The Department of Investment and Public Asset Management, the Department of Commerce and ECGC are working out business plans because these details will have to be presented to potential investors later to take the process forward,” said another person.
The government’s immediate focus is on divestment of its stakes in IDBI Bank, NMDC Steel, Shipping Corporation of India and the Indian Renewable Energy Development Agency, among others.
Announcing the Cabinet decision regarding the ECGC IPO in September 2021, commerce and industry minister Piyush Goyal had said that the company had recorded “continuous surplus and made dividend payments to the government for the last 20 years”. Its IPO, therefore, should be received well by the market, he had said.
The proposed listing was aimed at enabling ECGC to mobilise fresh resources from the market and substantially bolster its ability to settle claims.
ECGC was set up in 1957 to offer credit insurance services to exporters against risks of non-payment by overseas buyers. It also provides insurance cover to banks against risks in export credit lending to exporters. The company’s net profit surged 90% yearon-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.
