India is poised to experience the fastest growth in ultra high net worth individuals globally in the coming years, as per a report by consultancy Knight Frank. Mumbai, the financial capital of India, has surpassed Beijing to become Asia’s leading billionaire hub. It currently ranks third globally in terms of billionaire count, trailing only behind New York and London. The ultra-wealthy population in India, defined as individuals with a net worth of at least $30 million, witnessed a 6.1% increase to 13,263 in 2023 from the previous year. Knight Frank predicts a remarkable 50.1% surge in this number by 2028, representing the fastest growth of UHNWIs worldwide.
A significant portion of India’s ultra high net worth individuals are leveraging their wealth to invest in luxury real estate, including properties overseas. According to Alok Saigal, the president of wealth management firm Nuvama Private, about 30% of investments by India’s UHNWIs are channeled into luxury real estate. Saigal highlights a shift from investing in land towards residential real estate, which offers more liquidity, especially following the impact of the pandemic. On average, an UHNW Indian owns more than two homes, with approximately 12% of the super-rich in India planning to purchase a new house in 2024, as stated in Knight Frank’s wealth report.
The trend of offshore investments is gaining traction among India’s ultra-rich, with a growing interest in diversifying assets globally. A significant preference for expensive real estate investments overseas is observed, with Dubai being a popular choice. Indian investors own around 20% of Dubai’s offshore real estate market. These luxury properties serve as vacation homes, rental assets, and potential investment opportunities. The allure of offshore investments stems from the desire for global exposure and asset diversification, according to experts in the wealth management industry.
Increasingly, the younger generation of affluent Indians is gravitating towards investing in startups as a means of diversifying their portfolios and generating wealth. A notable trend is observed where individuals who studied abroad are returning to India to establish businesses or invest in emerging companies. This wave of startup investments is positioning India’s UHNWIs to capitalize on high-growth sectors such as fintech, healthcare, and technology. Consumer goods startups are particularly favored, reflecting a keen interest in participating in India’s burgeoning consumption market.
India’s wealthy individuals are actively exploring alternative investment opportunities to enhance their portfolios. A strategic emphasis on diversification across various asset classes and geographic regions is evident among UHNWIs, according to experts. Luxury goods, including jewelry, art, and watches, are receiving significant allocations from India’s ultra-rich. These alternatives not only hold intrinsic value but also serve as cultural symbols and status markers. Equities remain a preferred asset class for India’s affluent due to their potential for high returns and robust performance in the market.
India’s ultra high net worth individuals are navigating a dynamic investment landscape characterized by a diverse range of opportunities. From luxury real estate to startup ventures and alternative assets, the affluent segment in India is actively seeking avenues for wealth creation and portfolio growth. With a strong focus on global diversification and strategic investments, India’s ultra-rich are positioning themselves to capitalize on emerging trends and capitalize on the country’s evolving economic landscape.