Indian Individual Wealth to outshine most countries across the globe; expected to triple by 2016, estimates KARVY Private Wealth

The Individual Wealth of Indians has grown consistently, from 73 lac crore last year to 86.5 lac crore currently. Moreover, it is expected to nearly triple by FY16 (at 23% CAGR) to reach a whopping 249 lac crore. Wealth of Indian Individuals has grown by over 18% as compared to a mere 9.7% for of global High Net Worth Individuals (HNIs) in the last one year. The growth was led by Fixed Deposits, Insurance, Equity and Alternative assets

Hyderabad, Andhra Pradesh, December 14, 2011 /India PRwire/ -- KARVY Private Wealth the wealth management arm of the KARVY Group, a leading financial-services conglomerate, released the 2nd edition of its India Wealth Report today.

KARVY's India Wealth Report continues to be the country's only report that gives an overall perspective of individual wealth of Indians and the expected pattern of future investments. The Report, based on extensive research, offers comparative asset class-wise break-ups between Indian and global wealth held by individuals, thereby providing insights for Indian investors on where they have under-invested or over-invested.

Driven by government support and industry enterprise, India's growth has emerged to become one of the great success stories of the last decade. In fact, despite formidable headwinds in recent years, including the 2008 global financial crisis, the subsequent Euro-zone debt impact, and the persistently high inflation, India continues to be one of the fastest-growing nations in the world.

The nation's spectacular economic growth has led to significant job creation, higher disposable incomes and enviable savings rates. Accordingly, there has been a major improvement in people's standard of living, both rural and urban. As savings get multiplied and people become more educated about their finances, there will be a greater inclination to manage one's finances effectively through long-term wealth management relationships.

Karvy Private Wealth, one of India's largest private wealth management firms, through its 2ndedition of the India Wealth Report, reaffirms its expectation of the consistent rise in wealth by Indian individuals across various asset classes. This one-of-its-kind Report closely studies patterns of individual investments across financial asset classes (excluding physical assets like gold and real estate) and finds that India's individual wealth is expected to nearly triple from the existing 86.5 lac crore to 249 lac crore by FY16. In fact, the wealth of India's HNIs has grown by over 18% compared to a mere 9.7% for global HNIs in the last one year.

The Report also presents a break-up of wealth allocated across asset classes and a comprehensive analysis of the investment trend expected in the coming years. With current annual household savings of about 34%, and expected to grow 8% on average, India is well poised to lead wealth creation in the global arena.

Interestingly, the Report shows that fixed deposits & bonds has become the top contributor to overall wealth held by individuals in India, displacing last year's topper, direct equity, primarily due to the uncertainty in the financial markets. In terms of growth, alternative assets topped the list with a rise of 59%, followed by provident fund and insurance, both around 46%. The performance of mutual funds, small savings and savings bank deposits were quite dismal, rising 4%, 1% and -9%, respectively.

Mr. Hrishikesh Parandekar, CEO & Group Head - Broking, Wealth Management & Asset Management - KARVY Group commented, "Karvy Group and its Private Wealth business are proud to release the 2nd edition of the India Wealth Report and continue our efforts of providing thought leadership to our industry and to the investing community at large. Through this effort, we aim to share detailed information on trends in Indian wealth and various asset classes, and help investors to evaluate their own asset allocations against that of the overall community. We are also happy to report in such times of gloom that the underlying trends in individual wealth in India continue to look robust and we see Indians continue to get richer."

Mr. Sunil Mishra, CEO - KARVY Private Wealth, said, "The combination of continuous reforms and favourable demographics have, 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. To put it differently, we have added as much wealth in the last five years as we have done in the first 50 years post-Independence."

Other Key Findings from KPW's India Wealth Report:

  • Fixed Deposits and Equities jointly aggregate around 62% of the total Individual Wealth in India
  • Indian Investors are more prone towards Debt instruments which comprise 68% of their wealth in comparison to global counterparts at 53%, in case of Equity - the global investors are less risk-averse at nearly 41% whereas Indians have invested approximately 32% of their wealth in the same category
  • Alternative asset instruments combined with retirement benefit investments like PF & Insurance is poised to grow significantly in the coming years

Estimated Individual Wealth in the world

The total estimated global wealth in financial and physical assets with HNIs in December 2010 was US$ 42.7 trillion.

Estimated Individual Wealth in India

The amount of overall wealth in India has been calculated on the basis of the sum of all investment assets. For the purpose of this Report only the financial investments with individuals have been considered, and does not include government and institutional holdings along with physical assets like Gold and Real Estate

The total wealth in India held by Individuals is estimated to be 86.5 lac crores. The detailed break-up is as follows:

TABLE 1: ASSET-WISE BREAK-UP OF INDIVIDUAL WEALTH IN INDIA

Asset Amount (in Crore) Proportion

Fixed Deposits & Bonds 26,76,878 30.95

Direct Equity 25,76,317 29.78

Insurance 15,25,73 17.64

Savings Bank Deposits 6,16,917 7.13

Small Savings 5,23,908 6.06

Provident Fund 4,11,901 4.76

Mutual Funds 2,88,543 3.34

Alternative Assets 29,565 0.34

Total 86,49,764 100.00

If we broadly consider the key asset classes, the same individual wealth in India stands as follows:

TABLE 2: ASSET CLASS -WISE INDIVIDUAL WEALTH IN INDIA

Name of Asset Amount (in Crore) Proportion

Equities 27,49,569 31.79

Debt 58,70,630 67.87

Alternative Assets 29,565 0.34

Total 86,49,764 100.00

Comparing this with how investors globally invest their wealth, it may be observed that globally, approximately 53% of individual wealth is in Debt investments, 41% in Equity and 6% in Alternative Assets.

As retirement benefits become more limited for the newer generation of government employees, we expect that segment will begin to increasingly focus on retirement planning. As awareness increases, more investments will be channelized into pension funds and retirement benefits as we will see a rise in insurance investments as private companies become more evolved.

Also as Indian companies are becoming more mature, and with increasingly more companies getting listed, Individual Wealth in equities is expected to reach 37% in India in FY 16, against 30% in FY11.

India's individual wealth in alternative assets is 0.34% of our total wealth in comparison to 6.2% globally; we believe that alternative assets will be a major investment avenue in India over the next few years. Alternative assets - including structured products, private equity and venture capital funds, Gold ETFs, and realty, film and art funds - are expected to grow at a rapid pace of 100% per annum.

Year Wealth(In lac crores)

FY 2011 86.5

FY 2012 106.87

FY 2013 132.00

FY 2014 163.00

FY 2015 201.29

FY 2016 248.62

Please click on below link for detailed report: https://rcpt.yousendit.com/1314015952/7aab62c691f521fa089a12adae709167

Notes to Editor

About KARVY Private Wealth (KPW):

KPW is the specialized wealth management division of the KARVY Group set up to cater to the high net worth individuals and business families keeping in mind their requirement for a different kind of financial planning and management that will augment not just existing finances but ensuring long term wealth creation. KPW prides itself in delivering best in class investment advice coupled with the soft touch of dedicated customer care and personalized attention. KPW is a world-class wealth management business achieved through high quality and honest advice emerging from incisive research, breadth of product suite and product neutrality. This advice is delivered by Wealth Advisors who understand the specific aspirations of each individual client.

KPW offers a wide array of products and services, providing clients a variety of options through a single point contact. The services they provide include Family Office Service, Comprehensive Financial Planning, Wealth Review & Investment Strategy, Goal Driven Investing, Risk Management, Property Purchase and Financing, Retiree Services, ESOP advisory among others. Along with Advisory Services they also help invest in various Domestic and International Products such as Structured Products, Private Equity, Portfolio Management Services, Equities, Debt Instruments, Commodities, Mutual Funds, Insurance and Real Estate. For details, please visitwww.karvywealth.com.

About Karvy Group:

The Karvy Group is a premier and leading integrated financial services company. Karvy services over 67 million investors in various capacities, and provides investor services to over 400 corporates.

The Karvy Group also covers the entire spectrum of financial services such as Stock broking, Depository Participants, distribution of financial products (mutual funds, bonds, fixed deposit, equities), Insurance broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, Wealth Management, NBFC, Placement of equity, IPOs, apart from Registry business. Such diversified offerings allows for scale, stability, and agile solutions for the financial markets. Karvy is focused on understanding its customer needs which helps in customizing/offering solutions which are best suited for clients.

Karvy's proven research capabilities and intelligence are the backbone for its various business divisions. This enables the design of new solutions & services, provides new insights to markets, predicts trends and arms the clients to make informed decisions. To know more about our businesses/services offerings please visit www.karvy.com

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