Chennai: Riding on the rise of growth in financial assets, individual wealth in India grew by 14 per cent in the financial year 2018 to reach Rs 392 lakh crore, a report has said.
Released by Karvy Private Wealth, the wealth management arm of Karvy Group, the report titled – ‘India Wealth Report 2018’ has stated that individual wealth in India grew by 14.02 per cent to reach Rs 392 lakh crore in FY18.
This was achieved by a huge 17.42 per cent wealth growth in financial assets and a sober 9.24 per cent wealth growth in physical assets, the report said.
Direct equity captured the top spot where Indian individuals have their wealth overtaking fixed deposits. Other notable assets which saw good growth include mutual funds, and alternative investments, the report said.
In the Asia Pacific region, India has the fourth largest population of millionaires, the report said and added that India was the fastest-growing major market globally in 2017, with a 20.4 per cent high net individual (HNI) population expansion and 21.6 per cent HNI wealth growth.
In FY18, positive performance of the equity market made it the preferred class for the UHNI/HNIs and direct equity now forms 20.7 per cent of the total wealth pie of individual financial wealth in India, the report said.
Mutual Funds remained one of the biggest growth drivers of wealth in FY18 with a growth rate of 34.5 per cent through both an increase in regular SIPs and lump sum investment. Owing to the positive performance in equities, the traditional bank deposits grew at much lesser single digit growth rates.
The wealth held by individuals in alternative investments grew by 33.46 per cent. The recent emerging market currency depreciation also saw a renewed interest in the international investments which saw a jump of 25.83 per cent for FY18, the report stated.
Among physical assets, real estate was the best performing asset class, growing at 10.35 per cent over the previous year.
It is estimated that the individual financial wealth in India will more than double to Rs 517.88 lakh crore by FY23 at a CAGR of 16.99 per cent. Direct equity and mutual funds are expected to be the growth drivers of this northward trend, growing at a CAGR of 24.41 per cent and 21.04 per cent respectively over the next five years, the report said.
Chief Executive Officer, Karvy Private Wealth, Abhijit Bhave, said, “Direct Equity has emerged as the preferred asset class in FY18. The volatility in world markets and the Indian market has been noteworthy of late, but India still stands tall and has reclaimed ‘the world’s fastest growth large-developing economy’ tag from China. We foresee that the coming five to seven years will be the time for equity as an asset class and investors can possibly treble their wealth in equities.”