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India's rich to quadruple wealth in four years as ranks of multimillionaires grow India's rich to quadruple wealth in four years as ranks of multimillionaires grow
(35 minutes later)
They call it the Richie Rich Club and it is about to get even richer. India's wealthiest will quadruple their net worth in the next four years, a report said, with hundreds of thousands of new entrepreneurs and inheritors to become multimillionaires. They call it the Richie Rich Club, and it is about to get even richer. India's wealthiest will quadruple their net worth in the next four years, a report says, with hundreds of thousands of new entrepreneurs and inheritors becoming multimillionaires.
The survey, based on interviews with 150 ultra-high net worth individuals, came amid signs of returning business confidence in the world's biggest democracy. Recent years have seen lacklustre growth, rising prices of basic foodstuffs and a weakening currency. The new Bharatiya Janata Party (BJP) government won a landslide victory in May on a pledge to reinvigorate the ailing economy. The survey, based on interviews with 150 ultra-high net worth individuals, comes amid signs of returning business confidence in the world's biggest democracy. Recent years have seen lacklustre growth, rising prices of basic foodstuffs and a weakening currency. But the Bharatiya Janata party (BJP) won a landslide victory in May on a pledge to reinvigorate the ailing economy.
Despite the slowdown, there are nearly a sixth more Indians worth more than $3.75m (£2.2m) than there were a year ago, the report for the Kotak Mahindra bank, noted. Despite the slowdown, there are nearly a sixth more Indians worth more than $3.75m (£2.2m) than a year ago, the report for the Kotak Mahindra bank notes.
"Cities are mushrooming, the middle class population growing, opportunities have increased manyfold and the political environment has improved greatly in recent months," said Murali Balaraman, a co-author. "Cities are mushrooming, the middle class population growing, opportunities have increased manyfold and the political environment has improved greatly in recent months," according to Murali Balaraman, a co-author.
Between them India's rich hold assets worth a trillion dollars, which is around a fifth of the total wealth in the country. Within four years, that total is likely to reach $4tn (£2.3tn), the report says, making three times as many people multimillionaires.Between them India's rich hold assets worth a trillion dollars, which is around a fifth of the total wealth in the country. Within four years, that total is likely to reach $4tn (£2.3tn), the report says, making three times as many people multimillionaires.
Serving the new rich – and the old money – is a booming luxury market.Serving the new rich – and the old money – is a booming luxury market.
"They really want to show or talk about their wealth in a really subtle way and consumption of luxury goods is a nice way to do it," Balaraman said. "They really want to show or talk about their wealth in a really subtle way, and consumption of luxury goods is a nice way to do it," Balaraman said.
Abhay Gupta, the CEO of brand consultancy Luxury Connect, said the market for top end goods and experiences would "only get bigger".Abhay Gupta, the CEO of brand consultancy Luxury Connect, said the market for top end goods and experiences would "only get bigger".
"There is a huge aspirational class who look up to what the very wealthy are doing and then copy it," he said."There is a huge aspirational class who look up to what the very wealthy are doing and then copy it," he said.
Cars are among the most popular items bought, the report says. Whereas five years ago locally made SUVs were shown off by the wealthy, now only foreign cars will turn heads. Mercedes saw a 47% surge in sales in India last year. BMW launched a new $200,000 (£117,700) model in Delhi this week. India's appalling infrastructure restricts demand, however. Lamborghini's chief executive, Stephan Winkelmann, admitted last year that the traffic and roads in India "are not so suitable" for the $450,000 (£265,000) sports cars. In India, Lamborghini sells two models: the Gallardo and the Aventador, which has a top speed of 217mph. Cars are among the most popular items bought, the report says. Whereas five years ago locally made SUVs were shown off by the wealthy, now only foreign cars will turn heads. Mercedes saw a 47% surge in sales in India last year. BMW launched a new $200,000 (£117,700) model in Delhi this week.
Winkelmann said Lamborghini's Indian customers were "much younger" than those in Europe, with a typical buyer being in his 30s. The most popular investments remain real estate – mainly within India – and jewellery. India's appalling infrastructure restricts demand, however. Lamborghini's chief executive, Stephan Winkelmann, admitted last year that the traffic and roads in India "are not so suitable" for the $450,000 (£265,000) sports cars. In India, Lamborghini sells two models: the Gallardo and the Aventador, which has a top speed of 217mph.
India's super-rich have long raised eyebrows around the world with spectacular spending. Mukesh Ambani, the country's wealthiest man, has built the world's most valuable home in Mumbai, the commercial capital. The tower, complete with helicopter pads and indoor cinemas, is worth an estimated $1bn (£500m). The three-day wedding of the niece of Lakshmi Mittal, the UK-based steel tycoon worth an estimated $16bn (£9.4bn), was reported to have cost $80m (£47m). Hundreds of guests were flown to Barcelona for the ceremony and party, which took place in a museum in the city. But buyers of luxury goods, searching for the psychological satisfaction of exclusivity, are increasingly demanding, the report said. One ordered nine cases of Japanese whisky costing over $750 (£440) a bottle for a wedding function. The attraction of the imported whisky was that no one who attended the wedding would find out how to source the same drink in India, the report said. Winkelmann said Lamborghini's Indian customers were much younger than those in Europe, with a typical buyer being in his 30s. However, the most popular investments remain real estate – mainly within India – and jewellery.
Another systematically bought identical pairs of Louis Vuitton bags then cut one up to design fabrics so her clothes matched her accessories. India's super-rich have long raised eyebrows around the world with their spectacular spending. Mukesh Ambani, the country's wealthiest man, has built the world's most valuable home in Mumbai, the commercial capital. The tower, complete with helicopter pads and indoor cinemas, is worth an estimated $1bn (£500m).
Even the traditional wedding is evolving fast. Presents such as silver plates, dry fruit or sweets – once sent with wedding invitations – are being replaced by gifts from top western designer brands. The three-day wedding of the niece of Lakshmi Mittal, the UK-based steel tycoon worth an estimated $16bn (£9.4bn), was reported to have cost $80m (£47m). Hundreds of guests were flown to Barcelona for the ceremony and party, which took place in a museum in the city.
"These days it's Rolex watches and Louis Vuitton bags," said Gupta. But buyers of luxury goods searching for the psychological satisfaction of exclusivity are becoming increasingly demanding, the Kotak Mahindra report says. One ordered nine cases of Japanese whisky costing over $750 (£440) a bottle for a wedding reception. The attraction of the imported whisky was that no one who attended the wedding would find out how to source the same drink in India, the report adds.
Another big spender systematically bought identical pairs of Louis Vuitton bags, then cut up half of them to make clothes that would match her accessories.
Even the traditional wedding is evolving fast. Presents such as silver plates, dried fruit or sweets once sent with wedding invitations are being replaced by gifts by top western designer brands.
"These days it's Rolex watches and Louis Vuitton bags," says Gupta.
Almost half new ultra high net worth individuals live in smaller provincial cities.Almost half new ultra high net worth individuals live in smaller provincial cities.
A high proportion give substantial amounts to charity, though the report noted the "growth of philanthropic spends in India has not been proportional to overall growth in ultra high net worth individual wealth". A high proportion give substantial amounts to charity, though the report notes that the "growth of philanthropic spends in India has not been proportional to overall growth in ultra high net worth individual wealth".
Balaraman, the co-author, said growth in the number of rich people would not result in social tensions as a wide gap in incomes and wealth is an "accepted norm" in India. Co-author Balaraman says that growth in the number of rich people would not result in social tensions as a wide gap in incomes and wealth is an "accepted norm" in India.
"People know that someone is rich and someone is poor and they carry on with their lives," he said. "People know that someone is rich and someone is poor and they carry on with their lives," he explains.