The number of ultra HNIs is likely to increase to over 3.43 lakh over the next few years, says Kotak Wealth Management Report 2014.
India
is a home to 1.17 lakh ultra-high net worth Individuals (UHNIs). Interestingly,
45% of UHNIs are based in non-metropolitan cities, shows ‘Top of the Pyramid
2014’, a report published by Kotak Wealth Management. The report highlighted
the growing pattern of UHNIs in India, trends or behavior and investment
pattern.
A person with a minimum net worth of Rs. 25 crore is considered to be UHNI as of 2013-2014.
The UHNIs
population has increased by 16% compared to last year. The report expects it to
triple over the next few years. The number may increase to over 3.43 lakh by FY
2018-19, said Murali Balaraman of Ernst & Young LLP in a press conference
held in Mumbai.
|
Asset Allocation Pattern of UHNIs |
|
|
Equity |
38% |
|
Real Estate |
29% |
|
Debt |
24% |
|
Alternative Investments |
9% |
In terms of net worth, UHNIs have Rs.104 lakh crore in FY 2013-14, a growth of 21 compared to Rs.86 lakh crore in the corresponding period last year. The report expects growth of 4X in the net worth of UHNIs to Rs.408 lakh crore by FY 2018-19.
While metros continue to dominate the UHNIs with 55% of share, non-metro also account for the home of rest of UHNIs. Of this 45%, a healthy 22% shares of UHNIs come from small cities and town.
Entrepreneurship and professionals have emerged as the primary segment of UHNIs. Both are the dominant source of wealth in India.
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, 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 38% from 35% in the preceding fiscal followed by real estate with allocation of 29%.”
Also, 26% of UHNIs surveyed include Private Equity (PE) investments in their portfolios, e-commerce is a new favourite on the PE investment blocks for HNIs.
Methodology:
The study categorized India’s rich in three segments – inheritors,
entrepreneurs and professionals. UHNIs in each of these categories exhibit
difference behavior in their spending and also investments. The report is based
on in-depth interviews with luxury service providers such as luxury travel
companies, luxury watch companies, jewellery companies, wealth management
relationship managers, and an extensive market research with 150 UHNIs across
multiple cities.
Click here to download the report.
