Kotak Wealth: Ultra HNIs glide on wave of optimisim

MUMBAI: As per a report by Kotak Wealth Management, the number of Indian ultra HNHs has increased by 17 per cent to touch around 137,100 in FY15 (E) and have seen a compounded annual growth rate (CAGR) of 22 per cent over the previous five years. Further, the net worth of ultra HNHs’ networth is projected to surge at a CAGR of 26 per cent from an estimated Rs. 128 lakh crore in FY15 to Rs. 415 lakh crore by FY20.

A special focus and recurring motif in Kotak Wealth Management’s report 'Gliding on Optimism' is the rise of the e-commerce industry, which has led to a new category of entrepreneurs who are young and ultra-rich. This has contributed to the lowering of the average age of ultra HNIs — and nearly half of them are below 40. In fact, analysis of PE and VC investments in FY15 has shown that technology (IT and e-commerce) is the preferred sector.

C. Jayaram, Joint Managing Director, Kotak Mahindra Bank Limited, said, "The ultra HNI landscape in India has transformed dramatically over the last few years. New emerging industries armed with disruptive technology have created space for a different economy, which has propelled the number of young ultra-rich entrepreneurs in India.”

Emerging cities and small towns continue to register a significant proportion of the ultra HNH population — 44 per cent of the total pie. Increased spends and investment patterns of ultra HNIs in three cities — Chandigarh, Ahmedabad, and Chennai — reveal interesting insights about the rise in income and diverse lifestyles influencing preferences across different parts of the country.

Key areas of investments and spends for the ultra HNHs continue to be equity and jewellery. Cities such as Pune and Bengaluru have emerged as preferred destinations for real estate investments. There is a shift towards commercial real estate, driven by higher rental realisations compared to the residential market — 36 per cent of the ultra HNIs that were surveyed for the report showed an interest in commercial properties. In terms of tracking their investment, the report noted that a majority of ultra HNIs (around 74 per cent) prefer investment portals.