Total individual wealth may hit Rs 518 lakh crore in 5 years

The total wealth held by individuals in the country is expected to touch Rs 517.88 lakh crore by FY23, growing at an annual rate of 16.99 per cent, according to a report.

Direct equity and mutual funds are expected to be the growth drivers of this northward trend, growing at a CAGR of 24.41 per cent and 21.04 per cent, respectively, over the next five years, the report named 'India Wealth Report 2018' by Karvy Private Wealth said.

Karvy Private Wealth chief executive officer Abhijit Bhave said the coming five to seven years are expected to be the time for equity as an asset class and investors can possibly treble their wealth in equities.

Individual wealth in the country grew by 14.02 per cent year-on-year to touch Rs 392 lakh crore in FY18, according to the report.

This was achieved by a 17.42 per cent wealth growth in financial assets and a sober 9.24 per cent wealth growth in physical assets.

Direct equity captured the top spot where Indian individuals have their wealth overtaking fixed deposits.

"Owing to the positive performance in equities, the traditional bank deposits grew at much lesser single digit growth rates," it said.

Other notable assets which saw good growth include mutual funds and alternative investments.

Astute investors realised the power of alternate investments and the wealth held by individuals in alternative investments grew by 33.46 per cent, the report said.

The recent emerging market currency depreciation also saw a renewed interest in the international investments, which saw a jump of 25.83 per cent for FY18, it added.

Among physical assets, real estate was the best performing asset class, growing at 10.35 per cent over the previous year.

Being the home of the fourth largest population of millionaires in the Asia Pacific region, India was the fastest-growing major market globally in calendar year 2017, with a 20.4 per cent high networth individual (HNI) population expansion and 21.6 per cent HNI wealth growth, according to the report.

It said positive performance of the equity market in FY18 made it the most loved asset class for the UHNI/HNIs and direct equity now forms 20.7 per cent of the total wealth pie of individual financial wealth in India.

Mutual Funds remained one of the biggest growth drivers of wealth in FY18 with a growth rate of 34.50 per cent through both an increase in regular SIPs and lump sum investment, the report added.