GST effect: 1,000 companies to launch IPOs in 4 years, says BSE chief

Once the government implements goods and services tax (GST), citizens could see an unexpected consequence, which is the launch of more and more IPOs from companies willing to sell shares to the public, says Ashish Kumar Chauhan, CEO of BSE (Bombay Stock Exchange).

He further says that most of these IPOs will be initiated by smaller firms that would become tax-compliant due to the levy since they'll no longer have anything to hide.

As per Chauhan’s estimates, around 1,000 companies will list on his bourse over the next four years.

"We have only scratched the surface," he told Bloomberg, adding that around 74 companies raised 276 billion rupees ($4.3 billion) through first-time share sales on the BSE in last fiscal, a record since 2010.

Investors and analysts have been holding debates and discussions regarding the effect that GST would have on the country's market. Most of them think that GST will initially face some issues even though it is widely being projected to boost government revenue and increase the ease of doing business in India.

"A lot of things are going to happen -- we don't know what," said Raamdeo Agrawal, joint managing director at Motilal Oswal Financial Services Ltd.

"But it is a huge positive development. It will have short-term hiccups for six months or so. But once it is done and people have accepted it, then the control of the economy will become far better."