Wednesday, 30 October 2019

Investors prefer financial assets more: Karvy


29/10/2019

PUNE: Karvy Private Wealth, the wealth management arm of the leading financial-services conglomerate Karvy Group, launched its 10th edition of ‘India Wealth Report 2019.’ According to this report, individual investors continue moving their wealth from physical assets to financial assets as the proportion of financial assets has inched up from 57.25% to 60.95% in last 5 years.

This report tracks down every rupee invested, in every asset class, by every individual in India.
Taking forward the acceleration of wealth growth over the last few years, individual wealth in India grew by 9.62% to reach Rs. 430 lakh cr in FY19. 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 & international assets.

On this occasion, Abhijit Bhave, CEO, Karvy Private Wealth, said, “Direct Equity continues to hold the fort in terms of investment preference in India. This shows the belief of investors in the Indian equity markets notwithstanding the volatility it has been through. We believe that India’s drive towards a USD 5tn economy will have a cascading positive effect on the individual wealth by 2024. We expect the HNI population to touch 1 million over the next five year.” 

In FY19, the individual wealth in financial assets witnessed an increase of 10.96% and grew to Rs.262 lakh crore as compared to Rs.236 lakh crore in FY18. Like last year, the Top 5 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.

In FY19 the individual wealth in Physical assets increased by 7.59% with Gold and Real Estate together covering 92.57% of this space. This fiscal year the total wealth held by individuals in physical form stood at Rs.167 lakh crores. By FY24 the total individual wealth in India is estimated to have a healthy growth rate at a CAGR of 13.19% to reach nearly Rs.799 lakh crores from the current wealth of Rs.430 lakh crore. The allocation to Financial Assets is estimated to be 66.11% while the allocation to Physical Assets would be 33.89%. 

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 pickup in consumption. Urban India will go hand in hand with the semi-urban and rural Bharat to achieve this feat.

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