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How GST May Boost the Primary Markets
Thu, 1 Jun Pre-Open

Much has been said and written about the soon-to-be-implemented goods and services tax (GST) regime.

We too have covered a lot of ground on this topic. From what impact the tax structure will have on individual sectors to how it will affect the macro economy - you can find a wide range of articles around this topic on our archives page. And if you want to dig deeper into the practical implications of this tax regime, we strongly recommend you download Vivek Kaul's free report on GST.

But recently we came across an article in Livemint that sheds some new light on what shift GST could bring for the primary stock markets.

The article quotes Ashishkumar Chauhan, the CEO of BSE Ltd, stating GST would prompt more companies to sell shares to the public.

As per him, smaller firms that become tax-compliant due to the levy of GST will be more inclined to go public. Due to this transition, he believes, there would be some 1,000 companies that will list on BSE over the course of next four years.

This can very well happen to be the case. Being tax compliant and keeping digital records will prompt more companies to get listed on the bourses. And the present optimism surrounding IPO's will give them a further push.

All this means that one can expect an array of IPOs after the rollout of GST.

In such a scenario, one shall remember to not get swayed by the buoyancy surrounding IPOs. Instead, like with any stock, one shall evaluate each IPO on its merits by considering its fundamentals as well as the attractiveness of valuations.

The 5 Minute WrapUp offers two ways to think about IPOs and explains how to profit from them. And if you wish to know what's the smartest way to profit from the 2017 IPO rush, download our latest report How to Get Rich with IPOs.

As far as GST is concerned, we believe it will also provide a level playing field to the existing listed players forming part of sectors having a high proportion of the unorganized segment.

Its implementation promises to transform India into a single common market and there are many sectors which will gain immensely from this transition.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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