India's population of high net worth individuals (HNWIs) is set to grow by 86 per cent by 2021, with the value of the wealth surging to Rs 188 trillion from Rs 95 trillion at present.
Globally, the number of HNWIs (those worth more than $1 million or Rs 71.3 million) is set to increase by 40 per cent over the same period.
India's wealthy population is expected to be the 10th fastest growing in the world, in a list dominated by emerging economic powers, with Iceland representing the only developed economy in the top 10. These are the key findings of 'India's Quantum Leap, a joint report by IIFL Wealth Management Wealth and Wealth-X, the leading providers of global data and insight into the wealthy.
Five hundred HNWIs, each with wealth worth ¥65 million or more, were interviewed for the report. The rich in India grew by 9.4 per cent to 284,140 in number between 2015 and 2016, and their wealth rose by 7.4 per cent. Over the past five years, this HNW population has grown by just a little less than 40 per cent, while its wealth has grown by 37 per cent during the period.
The report categories the wealthy as HNWIs (net worth between ¥65 million and ¥s 650 million), VHNWIs (net worth between ¥650 million and ¥2 billion) and UHNWIs (more than ¥2 billion).
An overwhelming 87 per cent of HNWIs are primarily self-made, with 18 per cent attributing part of their wealth to some form of inheritance, stated the report. As a whole, UHNWIs comprise a slightly older demographic than HNWIs, with just over half of India's wealthy aged over 55 years, and 27 per cent over the age of 65 years.
India's UHNWIs are richer than their global counterparts, holding an average wealth of ¥8.65 billion, compared to the average equivalent of ¥7.8 billion for the typical global UHN WI. Investment funds (comprising mutual funds, managed funds, ETFs, etc) make up almost one-third of the total assets held by the super wealthy, and 84 per cent hold at least some of their fortune in these funds. One-in-five holds more than half of their wealth in investment funds.
Twenty-eight per cent of India's richest individuals sees property as over-represented in their portfolios. "As these wealthy investors seek better returns, equities and direct investment in businesses other than their own appear to offer better opportunities," said the report.
Of all philanthropic donations in India, 37 per cent are made to education, 15 per cent to public/societal causes and 10 per cent to health. The average amount given by donors in India is ¥0.78 billion.
Despite a burgeoning confidence in their ability to make money, two fifth of those surveyed said they were worried about losing their wealth. This was a particular concern for women, HNWIs and those whose wealth is tied up in property.
However, for those whose wealth was made through the sale of their business, it was less of a worry because they have already cashed in, and fee! less exposed to the prevailing risks of the business environment that could affect a single company or industry.