Ultra HNI segment to treble in 5 years; growth to come from small towns: Report

MUMBAI: The number of ultra high networth individuals (UHNIs) is expected to treble in the next five years to 2,19,000 which will also see the combined networth of those under this category grow five times to over Rs 235-trillion, a report said.

"Because of liberalisation and general economic growth, there is bound to be an increase in the ultra HNI segment," ratings agency Crisil's Managing Director and Chief Executive Roopa Kudva told reporters here today.

Kudva said in the report--Top of the Pyramid--that Crisil and Kotak Wealth Management have set a networth of over Rs 25-crore or USD 5 million as the benchmark for qualifying into the UHNI segment.

She added that the projection is based on a minimum growth of 7.5 per cent in the GDP every year which will surely happen for "decades to come".

Presently, 90 per cent of the UHNIs wealth resides in the top ten cities of the country, Kudva said, adding that going ahead, the growth will come more from the smaller towns which constitute a minority now.

The report based on analysis of Government data and interviews of luxury brand managers and existing UNHIs says a majority (37.2 per cent) of the investible surplus is deployed in the real estate sector followed by equities (33.1 per cent), 20.4 per cent in debt and 9.2 per cent in alternate assets.

The survey, which divides the UHNIs into three categories of inheritors, self-made and professionals, also found that a majority of purchases done by those in the segment are not impulsive, but planned.