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India Wealth Report 2017 by Karvy

Karvy has come up with several interesting insights into their India Wealth Report. 

Individual wealth in direct equity rose around 26.8% to Rs 37.6 lakh crore in FY17

Fixed Deposits retained top spot to be India’s most preferred financial asset

– Financial Assets ruled the roost in wealth creation in FY17

– Wealth in real estate is likely to double in next 5 years, signifying a turnaround for the sector in coming years   

Highlights:

  • Total wealth held by individuals in India has grown by 11% to Rs 344 lakh crore in FY17. Karvy predicts overall wealth in India to nearly double to Rs 639 lakh crore at a CAGR of 13% over the next 5 years
  • Individual wealth in financial assets grew by 14.63% to reach Rs 204 lakh crore. This handsome growth was driven by Direct Equity (26.8% growth), Mutual Funds (39.2%), Savings Deposits (27.85% growth) and Current Account Deposits (39.72% growth)

  • Over 66% of wealth in financial assets is held in direct equity, fixed deposits, insurance and savings deposits
  • Individual Wealth in physical assets stood at Rs 140 lakh crore, slowing down to just 5.92% growth as compared to 10.32% growth in the previous year.Individual Wealth in physical assets stood at Rs 140 lakh crore, having grown by 5.92% as against 10.32% recorded in FY16. Individual wealth in gold stood at Rs 68.45 lakh crore, which is close to half of the total physical assets base. Similarly, wealth in real estate came in second at Rs 60.25 lakh crore. Gold and real estate together form nearly 91% of the physical wealth in India.

  • Gold and real estate form 91% of physical assets, where individual wealth is growing at a slower pace
  • IPOs, pre-IPOs and unlisted equities/private equity are the flavors of the current time among HNIs who seek higher returns on account of unlocking of potential valuation upon listing
  • Individual wealth in Direct Equity is expected to grow at a CAGR of over 21% in next 5 years to reach almost Rs 100 lakh crore. This will have a rub-off impact on other financial assets like mutual funds, insurance and pension funds leading to high growth
  • The implementation of various reforms such as GST, RERA, Insolvency and Bankruptcy Code and recapitalization of banks among others are likely to move more informal sector into the formal economy and hence boost GDP and individual wealth.

We feel Mutual funds have played a big role in the growth of equity investments. Share your insights and thoughts on the same.

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