The economy may not have been in the best of shape last year, but that’s mattered little to the brisk march of India’s ultra rich. Their ranks kept swelling and their wealth growing. From 1,17,000 in 2013-14, the number of ultra high net worth households in the country grew 17 per cent to 1,37,100 in 2014-15, estimates the ‘Top of the Pyramid 2015’ report published by Kotak Wealth Management. It’s not an easy club to break into — a household must have a net worth of at least ₹25 crore mapped over 10 years to pass muster. The combined net worth of such households is estimated to have risen 23 per cent to ₹128 lakh crore (that’s 128 followed by 12 zeros) last year.

And if you thought the moneybags of metros, such as Mumbai and Delhi lorded over all this wealth, think again. As much as 44 per cent of the ultra rich in the country are based in non-metro centres. Clearly, smaller centres such as Ludhiana, Coimbatore, Indore and Aurangabad pull quite some weight.

The ultra rich are not only widespread but they also reflect in many ways the diversity of the country. So, the money practices of the moneyed in the country’s West seem to differ quite a bit from those in the South which again appears rather in contrast to that in the North. This is reflected in the report’s comparative study of lifestyle and investment patterns of ultra HNIs in Ahmedabad, Chennai and Chandigarh — the first two are among India’s wealthiest cities in terms of GDP, while the last has among the highest per capita incomes in the country.

Different lifestyles

The oft-heard generalisations of the big-spending North, the generous South, and the practical West seem to apply to the very wealthy of these regions too. So, last year, the ultra rich of Chandigarh spent 45 per cent of their income on discretionary and non-discretionary expenses, higher than the national average of 40 per cent.

The Chennai wealthy on the other hand spent a lower 39 per cent of their income on expenses, while at 41 per cent, the moneyed of Ahmedabad are middle-of-the-road on this parameter.

The Chennai rich may not spend as much on themselves as the others, but when it came to philanthropy, they open their purse-strings wider. The ultra HNIs of the city spent 9 per cent of their income on charity, above the national average of 6 per cent and nearly double the 4 per cent and 5 per cent that the very wealthy of Chandigarh and Ahmedabad do.

At 23 per cent of his income, the rich Chennaite’s investment in primary business is more than his counterpart in Chandigarh and Ahmedabad, and more than the national average. The financially savvy Ahmedabadi may be middle-of-the-road when it comes to personal expenses, charity, and primary business investment. But at 19 per cent of his income, his investments for personal wealth place him at the top of the charts.

The upshot: Going easy on expenses and personal wealth investments leaves the ultra-rich in Chennai with the maximum percentage of savings (14 per cent) among the three cities. The ultra-rich in Chandigarh and Ahmedabad have 11-12 per cent of their income in savings, much below the national average of 15 per cent.

Varying asset preferences

It’s not just the spending choices, the ultra rich across the country also invest their wealth differently. Those in Chandigarh exhibit a clear preference for physical assets over financial ones — more than half their investments are in real estate. On the other hand, the wealthy in Ahmedabad, known for being savvy when it comes to the financial markets, invest mostly in financial instruments — equity makes up 49 per cent and debt accounts for a quarter of their investments.

The Chennai rich also prefer mostly financial assets (47 per cent equity and 18 per cent debt) but their penchant for gold also makes them big investors in this alternative asset class — the yellow metal accounts for 11 per cent of their investments, higher than the national average of 9 per cent.

The Kotak report, prepared after surveying 225 ultra HNIs across multiple cities, sums its up aptly, “Ultra HNIs of Ahmedabad define the mood of the financial markets, the ones in Chandigarh define the real estate sentiment, and the ones in Chennai define the commodity market in India.”

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