Indians are fast becoming richer.
The world’s second-most populous country is expected to see a 63% rise in the number of ultra-high-net-worth individuals (UHNWI), those with a wealth of USD 30 million or more. According to a new report by property consultant Knight Frank India, over the next five years India will have 11,198 UHNWIs.
Knight Frank’s Wealth Report 2021 said there are currently 521,653 super-rich individuals globally, of which 6,884 are in India. The global UHNWIs number is predicted to grow by 27% between 2020 and 2025 to 663,483.
“India is expected to see incredible growth of 63% by 2025, making it the second-fastest-growing country in terms of number of UHNWIs,” Knight Frank India said in a statement.
Despite the uncertainty in the global market, ultra-rich Indians in 2020 experienced a 59% increase in their wealth, the report found. This year, the trend will continue, with 91% of Indian UHNWIs likely to see an increase in wealth with the start of a new economic cycle.
The billionaire’s club in India will expand by 43% to 162 by 2025 from the current 113 in 2020. This will outpace the global average growth of 24% and Asia average of 38% during this period.
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“With the economic operability reaching high levels of its efficiency post the pandemic, India will be striding to make an entry into the USD 5-trillion club in the next few years,” said Shishir Baijal, chairman and managing director, Knight Frank India.
According to him, India is expected to further strengthen economically and gain a formidable position as an Asian superpower paving an ecosystem for the rise of new sunrise sectors.
“The new economic opportunities will help bring lucrative wealth creation assets which will add new wealthy individuals in the country,” Baijal said.
Increasingly over the years, these UHNWIs have found that investing in startups is a lucrative alternate investment vehicle that is a high-risk, high-return game. They park their money in tech startups either through their family offices that invest in an existing VC firm or by creating an in-house fund.
At present, Mumbai has the highest number of ultra-rich at 920, followed by Delhi and Bengaluru, which have 375 and 238 UHNWIs, respectively. According to the report, an individual requires USD 60,000 to join the wealthiest 1% club in India, which has a population of over 1.3 billion.
Jewelry is the most preferred object of desire for Indian UHNWIs, the report said, followed by art, watches, wine, and classic cars.
Region-wise, Asia is likely to see the highest rise in the number of UHNWIs, with an estimated growth of 39%, led by Indonesia (67%) and India (63%). Although Indonesia will see 67% growth in its UHNWI population by 2025, the highest globally, India’s UHNWI population will be 10 times that of Indonesia, the report said.
“Asia is the key wealth story. The US is, and will remain, the world’s dominant wealth hub over our forecast period,” Liam Bailey, global head of research at Knight Frank said. “By 2025, Asia will host 24% of all UHNWIs, up from 17% a decade earlier. The region is already home to more billionaires than any other (36% of the global total),” he added.