Mumbai: With an improvement in economic sentiment, India’s super rich are moving out of their comfort zones and allocating higher amounts of their investible surplus in more risky ventures.
They are now increasing their spends towards luxury travels, exotic foods, philanthropy and investments, with avenues like private equity being explored widely. Some are even aspiring to undertake a space travel while a significant number of super rich are showing keen interest in polar expedition as well.
According to Kotak Wealth Management’s Top of the Pyramid 2014 report, the number of ultra high net-worth households (UHNHs) during FY14 stood at 1,17,000 (0.05 per cent of Indian households), registering a growth of 16 per cent from 1,00,900 during FY13. Their net worth during the period is estimated to be around Rs 104 lakh crore.
A household is regarded as ultra high net-worth if it has an annual income of Rs 3-4 crore and an investible surplus wealth of over Rs 25 crore. According to Kotak, the number of such households is expected to triple to 3,43,000 over the next three years while their total net-worth is expected to touch Rs 408 lakh crore by FY 2018-19.
However, there is a marked difference in the way various segments of UHNH spend their surplus wealth. While about 50 per cent of entrepreneurs and inheritors of wealth increased their expenses over the last year, only 30 per cent of professionals showed a similar increase.
The trend is reflected in leisure expenditure as well, where nearly a third of all entrepreneurs and inheritors increased their spends, while only 13 per cent of professionals, did so, reflecting a more conservative outlook.
