India Home to 1.17 Lakh Ultra-High Networth Individuals

By SiliconIndia   |   Thursday, 24 July 2014, 13:29 Hrs   |    1 Comments
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BANGALORE: There has been a tremendous rise in the number of ultra- high networth individuals in India. The net worth of Rs 25 crore has strike 16percent to 1.17 lakh compared to last fiscal year. Moreover it is expected that the figures will be tripled to 3.43 lakh in the next 3 years, reports

As for the primary wealth held by the rich group, which also includes professionals having an annual income of over Rs 3 crore, grew 21 per cent to Rs 104 trillion that is Rs 104 lakh crore, and which will grow four times to Rs 408 trillion in the next three years, says a wealth report by the Kotak group and Ernst & Young.

Consultancy firm E&Y partner Murali Balaraman said, "There has been an impressive rise in wealth creation and will only increase in the years ahead. Growth in the underlying wealth will outpace growth in the number of UHNIs.”

His colleague Abizer Diwanji said, “From the public point of view, managing the growth of the rich people will not cause any tensions as economic disparity is an ‘accepted norm’ in the country.”

The interviews, done in March before the outcome of the general elections, pointed out to much confidence on the economic environment among the UHNIs.

Of the ultra-high networth individuals in India, 150 individuals and another 15 to 20 companies who were associated with the sector which include selling of luxury brands and wealth managers, were interviewed to examine how the wealth gets used up  for  leisure, travel, investments and philanthropy.

Abizer Diwanji said the rate of spending has increased from 30 percent in the fiscal year 2012 to 44 percent in the fiscal year 2014. He also said, investing in real estate continues to be a chosen possibility, allocations to equity also increased to 38 percent in the fiscal year of 2014.

The survey states that UHNIs are changing their investment pattern considering the stability in the market and shifting their investments from safer asset classes such as debt, fixed deposits to real estate and equity.

C Jayaram, Joint Managing Director of Kotak Mahindra Bank said, “With the improving micro economic indicators, the interest of UHNIs seems to have shifted from fixed income products to equity now. UHNIs have given highest allocation to equity in previous fiscal. The allocation has now gone up to 38percent from 35percent in the preceding fiscal followed by real estate with allocation of 29percent.”

In terms of philanthropy, over 60 percent of the surveyed UHNIs said they would pay to charities while planning their annual expenditure.

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