Individual wealth of Indians is expected to nearly triple from the existing Rs 86.5 lakh crore ($1.6 trillion) to Rs 249 lakh crore by FY2016, according to a report from Karvy Private Wealth, the wealth management arm of the Karvy Group.
According to the report, the wealth of India’s high networth individuals (HNIs) has grown by over 18 per cent, compared to a mere 9.7 per cent for global HNIs in the past one year.
“The combination of continuous reforms and favourable demographics has, in the long run, placed India’s GDP firmly on the high-growth path. Add to this the nation’s middle-class values of high savings and we are clearly poised at an inflection point in terms of wealth accumulation,” said Sunil Mishra, CEO of Karvy Private Wealth.
The report notes that fixed deposits and bonds have become the top financial instruments in the overall wealth held by individuals in India, displacing last year’s topper, direct equity, primarily due to the uncertainty in the financial markets.
Fixed deposit and equities jointly aggregate around 62 per cent of the total individual wealth in India. The report also states how debt instruments account for a higher share of individual wealth in India, compared to the global average.
It also adds that individual wealth in equities is expected to reach 37 per cent in India in FY2016, as against 30 per cent in FY2011.
India’s individual wealth in alternative assets is 0.34 per cent, compared to 6.2 per cent globally.
In terms of growth, alternative assets topped the list with a rise of 59 per cent, followed by provident fund and insurance, both around 46 per cent. Total wealth under mutual funds rose 4 per cent last year.