9 in 10 super-rich Indians get richer in 2022, confident of minting money in 2023 too: Knight Frank

• Around 35% of Indian UHNIs saw their total wealth grow by over 10% in 2022.
  
• Super-rich are defined as those who have an investable surplus of ₹25 crore or more.
  
• Indian super rich had a better year than their global counterparts as only 40% of the latter could claim that their wealth increased in 2022.
  
• Indian UHNIs allocated no funds towards crypto assets, unlike their APAC (1%) and global (2%) counterparts.
  
• Only 4% of super-rich wealth went into passion investments with most of this going into art, watches and luxury handbags.

Despite permacrisis, as many as nine out of ten super-rich Indians were able to grow their wealth in 2022, according to a report by Knight Frank. Super-rich or ultra high networth individuals (UNHIs) are defined as those who have an investable surplus of ₹25 crore or more.

India’s super-rich in particular had a better year than their global counterparts – only 40% of the latter could claim that their wealth increased in the year that saw a Ukraine war-led supply chain crisis, big tech meltdowns and when the growth outlook for most nations was lowered by multilateral agencies.

Around 35% of Indian UHNIs saw their total wealth grow by over 10% in 2022.

“As India emerges as a market of opportunity which is expected to remain in growth mode despite an impending global slowdown, wealth held by UHNIs is expected to grow in 2023. The optimism of the ultra-wealthy on wealth generation here is far higher than their global counterparts and this shall serve as the bedrock of investment and consumption decisions,” said Shishir Baijal, chairman and MD at Knight Frank.

The report titled The Wealth Report: Outlook 2023 used data from a survey of wealth managers, private bankers and family offices combined with industry experts.

Indian respondents to the survey are also optimistic of the year ahead. “While 47% expect wealth (of the ultra-wealthy) to increase by more than 10%, 53% expect wealth to rise by at least 10% over the previous year. Globally, only 69% of respondents expect a rise in wealth and about 14% also responded to say that wealth will decline,” the report said.

Where are the Indian super-rich investing?

Equities, at 34%, attracted the highest proportion of investable wealth of Indian UHNIs in 2022. They also invested 16% of their wealth in bonds as they sought stability in an uncertain environment. Interestly, no investments from Indian UHNIs went into crypto assets even as those in the Asia-Pacific and globally pumped in 1% and 2% of their wealth, respectively, into them.

A significant proportion of 25% was allotted to commercial properties, either directly through ownership or indirectly through funds. This includes directly in the form of assets, and indirectly via funds and REITs or real estate investment trusts.

“The rise of commercial assets as an investment category with high allocation is a sign of improved confidence among investors towards India’s growth story,” the report said.

But there is an unwavering love for residential properties amongst Indian super-rich as they own 5.1 residences on an average. This is much higher than 4.2 units for their global counterparts. About 14% of UHNIs purchased a home in 2022, and about 10% are expected to make a new home purchase in 2023.

Indian UHNIs are expanding their orientation from the Asia-Pacific to more global markets in Europe, Middle East and Africa (EMEA) and Americas. On top of Indians’ choices is the United Kingdom, with 47% respondents showing affinity towards it.

“The UK is a global gateway country and India has business and personal interest in that nation state, which has hugely propelled its popularity. Interestingly, the second spot was taken by UAE (41%), becoming a hot spot for Indians to invest. USA (29%) and Canada (18%) were third and fourth-placed destinations for investments in property,” the report said.

Where are your passions?

Only 4% of super-rich wealth made it to ‘passion-led’ investments. In this category, the most preferred are – art, watches and luxury handbags – with over half of the respondents showing an inclination towards these.

The next favourite passion of the super-rich remains jewellery, followed by an equal amount of interest for furniture and wine. While rare whiskies took up the next spot, unusual pastimes like collecting coloured diamonds and coins are what a very small proportion of the super-rich are keen on spending their wealth on.

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