Major part of this growth came from financial assets: study
Even as global wealth
saw a decline in 2018-19, individual wealth in India rose almost 10% to ₹430
lakh crore primarily on account of higher domestic participation in capital
markets, mutual funds and a rise in gold prices.
According to a study
by Karvy Private Wealth, individual investors continued moving their wealth
from physical assets to financial assets as the proportion of financial assets
rose from 57.25% to almost 61% in last five years with direct equity
maintaining the top position among financial assets.
“Taking forward the
acceleration of wealth growth over the last few years, individual wealth in
India grew by 9.62% to reach ₹430 lakh crore in FY19,” Karvy said.
“A majority of this
growth was achieved by an impressive 10.96% wealth growth in financial assets
as compared to physical assets which grew by 7.59%. Direct equity continued to
act as a major proponent of investor wealth as it moved up by 6.39%, retaining
the top spot. Other notable assets which saw good growth include mutual funds,
pension funds, alternative investments and international assets,” it added.
While the individual
wealth in financial assets witnessed an increase of 10.96% and grew to ₹262
lakh crore in FY19, compared with ₹236 lakh crore in FY18, the top five
destinations for investment allocation were direct equity, fixed deposits,
insurance, saving accounts and cash with a total of 72.33% contribution in
overall financial assets.
Meanwhile, the
individual wealth in physical assets rose 7.59% in FY18 with gold and real
estate together covering 92.57% of this segment. Total wealth held by
individuals in physical form stood at ₹167 lakh crore in FY19.
Interestingly, the
total individual wealth in India is estimated to have a healthy growth rate at
a CAGR of 13.19% to reach almost ₹799 lakh crore by FY24. While allocation to
financial assets is estimated to be 66.11%, allocation to physical assets will
be 33.89%, as per the study.
“Massive investment in
infrastructure and green energy, backed with a regulatory boost with tax
reforms, aided by a huge young workforce, will accelerate the Indian economy
towards the $5 trillion target once there is a pick-up in consumption. Urban
India will go hand in hand with the semi-urban and rural Bharat to achieve this
feat,” Karvy said.
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