Individual wealth to nearly double in 5 years, says Karvy

Wealth manager Karvy Private Wealth, in its tenth annual India Wealth report, said the individual wealth is likely to grow at a compound annual growth rate (CAGR) of 13.2 per cent to ~799 trillion as India becomes a $5trillion economy.

The report estimates this will happen around FY24.

Individual wealth grew at 9.6 per cent to reach ~430 trillion over last year, helped by growth in the financial assets. Financial assets grew 10.96 per cent and physical assets like land grew at 7.59 per cent.

“Direct equity continues to hold the fort in terms of investment preference in India. This shows the belief of investors in the Indian markets, notwithstanding the volatility it has been through. We believe India’s drive towards a $5-trillion economy will have a cascading positive effect on individual wealth by 2024,” said Abhijit Bhave, chief executive officer, Karvy Private Wealth, in a statement on Wednesday. He expects the ranks of the wealthy to reach 1 million by FY24.

The International Monetary Fund downgraded expected growth for India from 7 per cent to 6.1 per cent for FY20 earlier in the week. It noted that demand was affected by corporate and environmental uncertainty amid a crisis in the financial sector.

Karvy believes growth will be positively aided by large investments in infrastructure and green energy, along with regulatory reforms. A pick-up in consumption is also important, it indicated.

Financial assets, in particular, are expected to lead growth. The total value of financial assets has more than doubled to ~528 trillion. This would imply a CAGR of 15.04 per cent. Physical assets are expected to grow at a CAGR of 10.03 per cent in comparison.

This would mean the share of financial assets, which is now more than 60 per cent, would reach 66 per cent by FY24.