Mumbai: The collective wealth of the Indian investing public is estimated at Rs 202 lakh-crore of which Rs 110 lakh-crore is in financial assets and Rs 92 lakh-crore is in physical assets like real estate and gold, according to the India Wealth Report by Karvy Private Wealth.
(The top five per cent owns a major portion of the wealth, though the report has not dealt with this aspect of wealth ownership).
The report, said Sunil Mishra, CEO, Karvy Private Wealth, provides for the first time, an overall perspective on wealth held by individuals in India across financial and physical assets.
He said due to the stupendous growth and development in financial markets in the last two decades since economic liberalisation a section of Indians now have 54.4 per cent of their wealth invested in financial as-sets.
The largest investment or 23 per cent of the total investment in financial assets is in fixed deposits and bonds Rs 25,30,608 crore, reflecting the risk averse nature of the Indian investor. FDs are now attractive with banks offering high interest rates of between 8-12 per cent.
This is followed by direct equity Rs 24,31,030 (22.1 per cent). The Nifty has given a return of 9.39 per cent as compared to minus (-)8 per cent in 2012. Insurance at Rs 18,93,766 (17.2 per cent) was the third most popular asset class followed by savings deposits Rs 15,08,599 crore (13.7 per cent), and cash Rs 11,44,740 crore (10.4 per cent). These are followed by investments in small savings, provident fund, mutual funds, alternative assets and international financial assets.
Gold and real estate are increasing in popularity as assets classes despite the existence of various financial instruments.
The report reveals that wealth in physical assets stood at Rs 92.06 lakh crore of which gold was 65.84 per cent at Rs 60,61,167 crore and real estate was 34.14 per cent at Rs 31,43,274 crore. This wealth held investing individuals growing at a faster pace in the next five years and could double to Rs 411 lakh-crore by 2018.
He said “we believe the macro-conditions should bottom out in 2014 and financial assets will start finding favour again.”
