India is on the cusp of witnessing an unprecedented growth in ultra-high net worth individuals, outpacing the global trend, as per consultancy Knight Frank. Mumbai, India’s financial capital, has already established itself as the leading billionaire hub in Asia, surpassing Beijing earlier this year. Ranking third globally in terms of billionaire count, after New York and London, the city is witnessing a remarkable surge in wealthy population. The number of individuals with a net worth of at least $30 million rose by 6.1% to 13,263 in 2023 from the previous year, and this figure is projected to grow by a staggering 50.1% by 2028.
A significant portion, around 30%, of India’s ultra-high net worth individuals’ investments are channeled into luxury real estate, including projects overseas. Alok Saigal, president of wealth management firm Nuvama Private, highlighted the shift from investing in land to residential real estate, especially since the onset of the pandemic. On average, these individuals own more than two homes, with 12% planning to purchase a new house in 2024. The offshore real estate market is gaining traction among Indian investors, with Dubai emerging as a favored destination for luxury real estate investments.
Investing in startups is a burgeoning trend among the younger generation of wealthy Indians, driven by exposure gained through education abroad and the desire to explore high-growth sectors such as fintech, healthcare, and technology. Nitin Chengappa, managing director at Standard Chartered Bank, emphasized that investing in early-stage companies is viewed as a strategy for diversifying portfolios and capturing significant returns. Consumer goods startups are particularly appealing to these investors, given the burgeoning consumer market in India poised to become the world’s third-largest by 2027.
India’s ultra-rich are actively seeking alternative investment opportunities, with a focus on diversification across various asset classes, geographic regions, and investment strategies. Luxury items like jewelry, art, and watches are among the preferred alternative investments, accounting for 17% of the UHNWIs’ wealth. These investments not only hold intrinsic value but also serve as status symbols and cultural artifacts. Equities continue to be a favored asset class, offering high returns and aligning with the country’s GDP growth and market trends.
India’s ultra-rich segment is witnessing a transformative shift in investment patterns, with a growing emphasis on real estate, startup ventures, alternative investments, and equities. The diversification of portfolios and the pursuit of high-growth sectors reflect a strategic approach to wealth creation and preservation. As India’s economy continues to evolve, the investment landscape for the ultra-rich presents a plethora of opportunities to explore and capitalize on emerging trends.
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