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From yoga to fitbits to travelling abroad for marathons and philanthropy, Ultra High Networth Households (UHNHs) are spending more than investing, according to a report. Themed “Luxury holds its Own”, the Kotak Wealth Management (KMW) in its seventh edition of ‘Top of the Pyramid’ talks about the spending pattern, digital behaviour, philanthropy and other family business narratives.
According to a survey conducted by KWM, the Ultra HNIs allocated 55 per cent of their income for discretionary spends where the share of apparels, electronic gadgets, philanthropy and holidays increased substantially. However, they are spending less on buying jewellery, especially gold, and their allocation towards investments has also gone down for the year 2017.
Growing numbers
According to Jaideep Hansraj, CEO, Wealth Management & Priority Banking, Kotak Mahindra Bank, the increase in personal spends captures the segment’s confidence in business growth.
“The UHNI household segment reiterate their confidence in the policies and reform measures undertaken by the Government,” he said.
The report added that UHNHs are expected to double to 330,400 by 2022; their numbers have gone up 10 per cent to 160,000 last year.
However, the UHNHs in India form less than half a per cent of the total population and hold about 70 per cent of the country’s total wealth at ₹153 trillion in 2017 and which is expected to almost triple at ₹352 trillion by 2022. The report also states that the Indians are getting wealthier at a younger age of 40 years. About 60 per cent of UHNIs are now below 40 years as against 47 per cent interviewed last year.
Growth rate
The survey reveals that the UHNHs growth rate in the last five years has been 12 per cent CAGR and about 56 per cent of these households came from the top four metro cities, while 18 per cent came from the next top cities such as Bengaluru, Ahmedabad, Pune, Hyderabad, Nagpur and Ludhiana. Hansraj said Aurangabad has emerged as the largest buyer of Mercedes in the country and Hyderabad for Lamborghini. The findings are based on data collected from over 200 UHNIs in the country
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