Even by the standards of Lonavala, a mountainous outpost 70 miles from Mumbai where India's nouveaux riches like to spend the weekend, Rakesh Jhunjhunwala's country home is extravagant.
The 15,000-square-foot 'bungalow' features a swimming pool, jacuzzi, karaoke studio, and gym, as well as party rooms and terraces where Jhunjhunwala entertains family, friends, and business associates.
Meanwhile, back home in Mumbai, the chain-smoking, 47-year-old founder of investment house Rare Enterprises has just bought a $5.4 million, six-bedroom duplex apartment in the tony Malabar Hill neighborhood.
"I have far more wealth than I need," says Jhunjhunwala, whose estimated net worth is just shy of $1 billion. "But it gives me the freedom to do what I enjoy and enjoy what I do."
Although hundreds of millions of Indians still live in grinding poverty, the economy is growing at an 8% annual clip, and the ranks of the well-off and just plain loaded are ballooning. Some 83,000 Indians today have liquid assets greater than $1 million, up from 71,000 two years ago, American Express Co. AXP estimates, and their numbers are increasing by 13% a year.
By AmEx' math, in 2009 there will be 1.1 million individuals with $100,000 in assets, a princely sum in India--up from 700,000 today. "I'm amazed by the wealth in this country," says Sujay Chauhan, who in April quit his job at technology researcher Gartner Group to found Aquasale, a boat dealer in Mumbai that already has seven orders for yachts worth a total of $10 million.
A lot of this is new money, not legacy Indian wealth. Up-and-coming sectors such as software services, telecommunications, finance, and real estate are minting new millionaires every day. And the Bombay Stock Exchange has more than doubled in the past two years, handing many investors tremendous capital gains.
"India is the fastest-growing market for wealth creation," says Nicholas Windsor, head of personal financial services at HSBC India HSBC, which last year set up a private banking unit to cater to clients investing upwards of $500,000.
Adds Ravi Trivedy, head of Business Advisory Services at consulting firm KPMG, which helps banks tailor services for rich clients: "For us it's a fabulous time."
The first place the new moneyed class typically shows off its cash is with a big house or plush apartment. While demand for homes over 3,000 square feet--palatial by Indian standards--was once confined to Mumbai and Delhi, more and more Indians in smaller cities want big houses, according to real estate consulting firm Cushman & Wakefield Inc.
In September, Ambience Builders & Developers Inc. plunked down $120 million for a 60-acre parcel in Hyderabad, with plans to turn it into high-end homes. And each of India's large cities boasts 400 to 500 houses listed at $2 million-plus, estimates Mumbai real estate agency Knight Frank.
"It feels good giving your family a comfortable existence," says Rohit Roy, an actor and talk show host who last year moved into a four-bedroom apartment facing the sea in Juhu, a posh Mumbai suburb.
Cars, of course, are another great way to get mileage out of your millions. Despite duties that effectively double the price of imported autos, sales of super-luxury models are gathering speed. National Garage, a nationwide chain of dealerships selling an assortment of brands, including Ferraris, says demand for the $200,000-plus machines vastly outstrips supply.
To bolster the Ferrari image, it has turned away 700 customers that "didn't suit our product profile," says marketing director Farhad Vijay Arora. Across town at Navnit Motors, customers last year snapped up 200 BMWs for as much as $150,000 and 10 Rolls-Royces topping out at $600,000-plus--about quadruple the number five years ago.
"We see a sudden surge of interest in these high-end luxury cars," says Navnit's marketing director, Sharad Kachalia.
To satisfy exploding demand, BMW next year plans to open an assembly plant in Chennai and hopes to expand its sales to some 1,800 Bimmers annually. That goal won't likely be hard to reach: Rival Mercedes-Benz DCX, which already has a factory in Pune, sold more than 2,000 cars last year.
Although well-to-do Indians have traditionally been wary of flaunting their money, more are wearing their wealth on their sleeves. Louis Vuitton CDI, Hugo Boss, Valentino, Gucci, and Fendi have all opened Indian stores in the past couple of years.
And Kimaya Fashions Ltd., a high-end shop in Juhu that has long sold Indian-designed clothes to society highfliers and Bollywood stars, is stocking more global brands such as Roberto Cavalli and Giorgio Armani. "The Indian story has just begun to unfold, and now we know this is for real," says Kimaya managing director Pradeep Hirani.
There's plenty of potential growth. All told, the market for high-end luxury clothing and accessories in India is worth some $434 million a year and is apt to hit $800 million by 2010, estimates consultant Technopak Advisors Ltd.
Indians last year spent $141 million on pricey wristwatches, a figure that's growing by some 40% a year, according to Technopak. "I'm not a gizmo person, but I like cars and watches," says Arun Mansukhani, 37, head of human resources at cellular carrier Hutch. His collection includes a Tag Heuer, a Mont Blanc, a Cartier--and a Porsche and a BMW. Wine sales are taking off, too, with help from the likes of the Wine Society of India.
The group, established in September, held a tasting at Mumbai's stately Taj Palace Hotel, where society divas and Bollywood stars nibbled on chicken tikka and sipped $160-a-bottle Château Latour à Pomerol.
Not all wealthy Indians are comfortable showing off their newfound riches. Umesh Chadha runs an oil and gas services company, Luminus Energy, based in Mumbai with offices in the U.S. and three other countries. He has three cars but is also happy to get around town in a rickety three-wheeled motorcycle taxi.
Although Chadha likes to vacation in the U.S.--he's planning an Alaskan cruise next year--he swears he hasn't changed much from his childhood days in Mumbai's Shivaji Park, a comfortable but not extravagant neighborhood. "I have maintained my middle-class values," he says.
Others are even more reluctant to show off. Three years ago eye surgeon Burjor Banaji bought a Mercedes C-Class sedan for his commute. He liked the Benz but sold it in September "to escape the attention, which was a nightmare." Today he drives an Octavia sedan from Volkswagen's Czech subsidiary, Skoda. "I love it," says Banaji, "because it's completely anonymous."