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REVEALED: How Indians are making money
Individual wealth of Indians is expected to triple by financial year 2016 to Rs 249 lakh crore (Rs 249 trillion), according to Karvy Private Wealth.
Individual wealth has grown from Rs 73 lakh crore (Rs 73 trillion) last year to Rs 86.5 lakh crore (Rs 86.5 trillion) at present, the wealth management arm of Hyderabad-based Karvy Group said in the India wealth report.
The wealth of individuals has grown 18 per cent, as compared to a mere 9.7 per cent for global high net-worth individuals in the last year, it said.
The report studied patterns of individual investments across financial asset classes, excluding physical assets like gold and real estate.
Fixed deposits and bonds have become the top contributor to overall wealth held by individuals in India, replacing the last year's topper, direct equity, primarily due to the uncertainty in the financial markets, the report said.
"We have added as much wealth in the last five years as we have done in the first 50 years post-Independence," said Sunil Mishra, CEO, Karvy Private Wealth.
With the wealth of Indians expected to boom in the coming years, let us have a more detailed look at the India wealth report.
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REVEALED: How Indians are making money
Asset-wise individual wealth in India
Fixed deposits and bonds: Rs 26,66,878 crore (Rs 26.668 trillion)
Proportion: 30.95 per cent
Direct equity: Rs 25,76,317 crore (Rs 25.763 trillion)
Proportion: 29.78 per cent
Insurance: Rs 15,25,735 crore (Rs 15.257 trillion)
Proportion: 17.64
Savings deposits: Rs 6,16,917 crore
Proportion: 7.13 per cent
Small savings: Rs 5,23,908 crore (Rs 6.169 trillion)
Proportion: 6.06 per cent
Provident fund: Rs 4,11,901 crore (Rs 4.119 trillion)
Proportion: 4.76 per cent
Mutual funds: Rs 2,88,543 crore (Rs 2.885 trillion)
Proportion: 3.34 per cent
Alternative assets: Rs 29,565 crore (Rs 295.65 billion)
Proportion: 0.34 per cent
Note: The data is based on only financial assets and not physical assets like real estate and gold. The total wealth in India held by individuals is estimated to be Rs 86.5 lakh crore (Rs 86.5 trillion).
Individual wealth does not include government and institutional holdings.
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REVEALED: How Indians are making money
Asset class-wise individual wealth in India
Equity: Rs 27,49,569 crore (Rs 27.495 trillion)
Proportion: 31.79
Debt: Rs 58,70,630 crore (Rs 58.706 trillion)
Proportion: 67.87 per cent
Alternative assets: Rs 29,565 crore (Rs 295.65 billion)
Proportion: 0.34 per cent
The data highlights the risk-averse nature of Indian individuals. Investments in debt instruments form a major part of the total individual wealth, with nearly 68 per cent parked in this asset class.
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REVEALED: How Indians are making money
Asset class-wise classification of global wealth
Equity: $14.09 trillion
Proportion: 40.7 per cent
Debt: $18.36 trillion
Proportion: 53.1 per cent
Alternative assets: $2.14 trillion
Proportion: 6.2 per cent
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REVEALED: How Indians are making money
Direct equity classification
Investor: Promoter holdings
Market capitalization: 32.92 per cent
Amount: Rs 22,06,501 crore
Investor: Institutions
Market capitalization: 47.95 per cent
Amount: Rs 32,13,904 crore
Investor: Retail investors
Market capitalization: 19.13 per cent
Amount: Rs 12,82,210 crore
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REVEALED: How Indians are making money
Mutual funds - individual wealth based on underlying investment
Asset class: Equity
Amount: Rs 1,73,252 crore (Rs 1.73 trillion)
Asset class: Debt
Amount: Rs 1,15,291 crore (Rs 1.152 trillion)
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REVEALED: How Indians are making money
Fixed deposits and bonds - individual wealth
Asset: Fixed deposits
Amount: Rs 26,70,008 crore (Rs 26.700 trillion)
Asset class: Bonds
Amount: Rs 6,870 crore (Rs 68.7 billion)
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REVEALED: How Indians are making money
Fixed deposits - individual wealth
Fixed deposit type: Bank FDs
Amount: Rs 25,71,873 crore (Rs 25.718 trillion)
Fixed deposit type: Corporate FDs
Amount: Rs 73,488 crore (Rs 734.88 billion)
Fixed deposit type: NBFC FDs
Amount: Rs 3,367 crore (Rs 33.67 billion)
Fixed deposit type: RNBC FDs
Amount: Rs 21,280 crore (Rs 212.8 billion)
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REVEALED: How Indians are making money
Bonds - individual wealth
Bond type: PSU bonds
Amount: Rs 2,445 crore (Rs 24.45 billion)
Bond type: Corporate bonds
Amount: Rs 4,425 crore (Rs 44.25 billion)
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REVEALED: How Indians are making money
Savings bank deposits - individual wealth
Bank: Commercial banks
Amount: Rs 6,02,610 crore (Rs 6.026 trillion)
Bank: Co-operative banks
Amount: Rs 14,307 (Rs 143.07 billion)
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REVEALED: How Indians are making money
Provident fund - individual wealth
Provident fund type: EPF
Amount: Rs 2,95,651 (Rs 2.956 trillion)
Provident fund type: PPF with banks
Amount: Rs 90,374 crore (Rs 903.74 trillion)
Provident fund type: PPF with post offices
Amount: Rs 25,876 crore (Rs 258.76 billion)
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REVEALED: How Indians are making money
Alternative assets - individual wealth
Asset type: Structured products
Amount: Rs 21,387 crore (Rs 213.87 billion)
Asset type: Private equity
Amount: Rs 2,970 crore (Rs 29.7 billion)
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REVEALED: How Indians are making money
Asset type: Gold ETFs
Amount: Rs 2,447 crore (Rs 24.47 billion)
Asset type: Real estate funds
Amount: Rs 2,044 crore (Rs 20.44 billion)
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REVEALED: How Indians are making money
Asset type: Film funds
Amount: Rs 453 crore (Rs 4.53 billion)
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REVEALED: How Indians are making money
Asset type: Art funds
Amount: Rs 264 crore (Rs 2.64 billion)
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REVEALED: How Indians are making money
Individual wealth - India versus global based on asset class
Name of asset: Equities
Global wealth: 40.7 per cent
Indian wealth: 31.80 per cent
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REVEALED: How Indians are making money
Name of asset: Debt
Global wealth: 53.1 per cent
Indian wealth: 67.86 per cent
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REVEALED: How Indians are making money
Name of asset: Alternative assets
Global wealth: 6.2 per cent
Indian wealth: 0.34 per cent
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REVEALED: How Indians are making money
Key trends
i) Total individual wealth in India is expected to nearly triple to Rs 249 lakh crore (Rs 250 trillion) by financial year 2016 from the current Rs 86.5 lakh crore (Rs 86.5 billion).
ii) Fixed deposits have regained popularity in financial year 2011 to become the single-largest investment class.
These instruments are expected to continue to be the largest and preferred investment class, at least in the next couple of years.
iii) Indian companies are becoming more mature and with increasingly greater numbers getting listed.
Individual wealth in equities is expected to reach 37 per cent in India in financial year 2016 against 30 per cent in financial year 2011.
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REVEALED: How Indians are making money
iv) As retirement benefits become more limited for the newer generation of government employees, they will begin to increasingly focus on retirement planning.
As awareness increases, more investments will be channelized into pension funds and retirement benefits.
v) Alternative assets, including structured products, private equity and venture capital funds, gold ETFs and reality, film and art funds, are expected to grow at a rapid pace of 100 per cent.
vi) Although the average investment size is larger, structured products and high yield debt will remain popular among high net-worth individuals as these are relatively safe in principal protection.