India’s wealthiest 1 pc holds 60 pc assets in real estate, gold: Report

New Delhi, Aug 4 (IANS) The top 1 per cent of India's wealthiest citizens have parked 60 per cent of their money in real estate and gold, according to a report on Monday. 

This segment of 'wealthiest citizens' is comprised of Ultra High Net Worth Individuals (UHNI), High Net Worth Individuals (HNI) and the affluent class, which accounts for only 1 percent of Indian households but controls nearly 60 per cent of the country’s total assets, the report by US-based wealth management firm Bernstein said.

This segment holds $11.6 trillion in total wealth and 70 per cent of India's financial assets, the report said. India’s total household wealth is estimated at $19.6 trillion, out of which $11.6 trillion, or 59 per cent, is held by this wealthy segment of the population.

Out of this, only $2.7 trillion is invested in serviceable financial assets that can be actively managed or reallocated, such as mutual funds, equities, insurance, and bank or government deposits. The remaining $8.9 trillion is held in non-serviceable assets, including gold, cash holdings, promoter equity, and physical real estate, according to the report.

The report indicates huge growth potential for asset management firms to grow their assets under management (AUM) over the next decade, as India's affluent class is looking for avenues to diversify their portfolios beyond gold and real estate.

The report highlighted how this wealth segment remains largely underpenetrated by formal wealth management services, with a considerable portion of financial wealth unmanaged. In a previous report, Bernstein had mentioned that specialised wealth managers currently hold only 11 per cent share in the liquid financial asset pool of India.

The findings also underscore a broader structural trend in India: while income inequality is high, wealth inequality is even starker. “The top 1 percent earns 40 percent of all income, while the ‘Rest of India’ holds only a small fraction of both income and assets,” the report said.

There are approximately 35,000 UHNI households whose net worth surpassed $12 million (Rs 100 crore). These households have an average asset value of $54 million (Rs 472.5 crore), including $24 million (Rs 210 crore) in financial assets.

According to the report, this affluent segment collectively held $4.5 trillion in financial assets, which amounts to 70 per cent of the country’s total financial wealth.

--IANS

aaron/na