High Net Worth Individuals' Wealth Up 23% in FY15: Report

Mumbai: India has witnessed a massive jump both in the number of high net worth individuals (HNIs) as well as their net worth, with the latter increasing 23 per cent over the year to Rs 128 lakh crore in spite of sluggish economic growth, says a report. The number of high net worth individuals grew to 1,37,100 by the end of fiscal year 2014-15, up 17 per cent from 1,17,000 a year ago, according to the report by Kotak Wealth Management and consultancy firm EY. The number of high net worth individuals is expected to grow at 20 per cent every year over the next five years to 3,48,000 by the end of 2020. Also, the net worth of high net worth individuals is estimated to grow to Rs 415 lakh crore by the end of FY20, it said. A person having a minimum net worth of Rs 25 crore or a professional with an annual income of over Rs 3 crore is labelled as a high net worth individual. The two companies interviewed 225 such persons while arriving at their conclusions. The surge in high net worth individuals and their net worth comes even as questions are being raised about the country's growth and some sections pointing to rising income disparities with the gap between "the haves" and "the have-nots" steadily increasing. The surge in the number of start-ups, particularly in the e-commerce segment, has helped bring down the average age of a high net worth individual, it said, without giving the exact age. However, the report said these new-age entrepreneurs prefer to invest back into their businesses rather than other classes which are preferred by wealth inheritors. The study has found that an increasing number of high net worth individuals are diverting their attention to equities as an asset class while the attraction of real estate is dipping. Kotak Mahindra Bank joint managing director C Jayaram said there is a slump in the residential segment while commercial space is looking a bit better. The residential segment will continue to remain muted for two more years. In equities, a bulk of the high net worth individuals prefer investing in banking and infrastructure stocks, Mr Jayaram said, pointing out that this suggests a preference for riding on the India story where banks are the barometers of the growth and also the ever-increasing demand for infrastructure. There is also diversity in cities where the growing number of high net worth individuals are based, it said, adding that there are unique characteristics of every city. Citing survey data, he said high net worth individuals in Chandigarh have higher spends and prefer investing in physical assets like realty. Ahmedabad, on the other hand, has higher discretionary spends with a greater appetite for financial investments, while such persons in Chennai allot more to charity and prefer investing in alternative assets like gold.

High Net Worth Individuals' Wealth Up 23% in FY15: Report

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