Ultra HNI wealth in India to hit Rs 380 lakh cr in five years: Study

The total wealth of high net worth individuals (HNIs) in India will grow 4.5 times in five years to touch a whopping Rs 380 lakh crore, says a study byKotak Wealth Management and Crisil Research.

The number of ultra HNIs has risen to 100900 in 2012-13 from 81,000 in 2011-12. This is expected to more than triple in the next five years to 329,000, the study titled Top of the Pyramid has said, addingnearly 46 percent of ultra HNIs in India are from non-metro areas.

Ultra HNIs are those with minimum assets of Rs 25 crore or annual income of Rs 3-4 crore.

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The focus of the report is on luxury homes and spending patterns among ultra HNIs, who have been further divided into three categories – those with inherited wealth, self-made HNIs and professionals.

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Spending patterns: About one-third of ultra HNIs indicated change in spending pattern in 2012 as their spending was adversely impacted by around 20-25 percent. Jewellery was the most gifted item with as many as 16.5 percent of the respondents saying they gave away jewellery to close family members.

**Investment trends:**The key source of wealth continues to be success in primary business, followed by real estate and investment in equity. A large percentage of respondents believe that there is a downturn and an early recovery is not in sight, indicating a level of pessimism about economy that was not seen last year. And nearly, 60 percent of professionals and over 70 percent of both inheritors and self-made HNIs said that they are following a disciplined approach to investments. Those from Mumbai and Delhi were highly risk-adverse compared with those from Kolkata and Chennai. As many as 29.1 percent said they spent their wealth on expenses, 31.3 percent as investment into primary business, 16 percent as investments for growing personal wealth, 15.7 percent went towards savings and 5.4 percent towards charity.

**Estate Planning:**The awareness of estate planning was definitely increasing and nearly 78.5 percent said that estate planning is necessarily. As many as 32.6 percent said they would go to a lawyer for advice on estate planning.