IIFL Wealth Index Report PDF

♦IIFL
INVESTMENT MANAGERS
INDIA’S QUANTUM LEAP
PART 01
IWI
IIFL WEALTH INDEX 2018

PART 01
INDIA'S
QUANTUM LEAP
We at IIFL Wealth Management are pleased to partner with Wealth-X
for the IIFL Wealth Management Wealth Index 2018 series.
The partnership represents a true collaboration between Wealth-X, the
world’s leading ultra high net worth (UHNW) intelligence and
prospecting firm, and IIFL Wealth Management, the leader in wealth
management for wealthy Indians. The IIFL Wealth Management
Wealth Index 2018 presents a comprehensive overview of India’s HNW
and UHNW populations. Compiled using Wealth-X’s exclusive and
extensive database of hand-curated intelligence, and a survey of more
than 500 wealthy Indians, the report offers unique insights into the
investment behaviours, hobbies, passions and interests of India’s
wealthy.
This first report of the three-part series, India’s Quantum Leap , focuses
on how India is creating wealth at a fantastic rate, and how the profile
of India’s wealthy is changing with the dynamism of the economy.
We very much hope you enjoy reading this as much as we’ve enjoyed
uncovering the hopes and aspirations of the new economic leaders of
our country.
Karan Bhagat
Founder, MD and CEO
IIFL Investment Managers
EXECUTIVE
SUMMARY
Almost three decades after opening up its These are the key findings from the
economy in 1991, India is on the brink of a inaugural IIFL Wealth Management Wealth
quantum leap in wealth generation with the Index 2018 report, India's Quantum Leap,
number of wealthy Indians and their affluence from one of India’s leading wealth
expected to rise by an astonishing 87% over management companies, IIFL Investment
the next five years. India's super rich are Managers. IIFL Wealth Management
expected to vastly exceed their global partnered with Wealth-X, the leading
contemporaries, making India a trailblazer provider of global data and insights on the
among the world's most powerful fortune wealthy, to produce one of the most
builders. The economy is home to 284,140 comprehensive studies on the wealthy to
wealthy individuals with a combined fortune date and measure this group uniquely
of INR95trn. By 2021, that figure will reach against its global rivals. In addition, IIFL
INR188trn. Wealth Management interviewed 500 high
net worth individuals (HNWIs) in India, the
As India's super rich head the wealth league most extensive survey of this powerful
table, their impact will be magnified around economic demographic, each with a
the world as they choose increasingly to personal wealth of INR65m or more. It is
invest overseas in business and property or to required reading for anyone seeking to
be educated abroad. Their luxury spending understand the economic resurgence of
power is set to explode in capitals from India and the fortune builders behind it.
London and New York to Paris and Dubai. The
Indian wealth factor has only just begun to India today has a population of 1.2 billion. The
come into play. country's economy and wealth generation are
being led by a group of HNWIs who are
driving a decades-long growth story that has
been turbo-charged by the business-focused
government of Prime Minister Narendra Modi.
He came to power in 2014 promising to
unlock India's potential by unleashing various
economic reforms and wealth creation.
India's speedy economic transformation is What is driving these growth predictions?
based on an interplay of characteristics that - The economic fundamentals remain strong,
make it one of the great growth stories of the including increased corporate fundraising
century. What are the underlying tectonic
- Changes targeting improvements in ease of
plates of India's growth? First, the seismic shift
doing business, such as National Company
towards urbanisation as the country
Law Tribunals. These have resulted in
transforms from a predominately rural to a
increased ease-of-doing-business scores
modern industrialised economy. Second, a
from the World Bank
middle class of hundreds of millions of people.
Third, rising consumer spending and, last, a - The GST (Goods and Services Tax)
government outlay amounting to INR3.96trn in introduced in 2017, which replaces a
infrastructure spending. previous fragmented indirect tax structure,
is expected to bring in substantially more
India's business elite has responded with revenue
vigour and confidence. India has overtaken - The Indian stock market enjoyed strong,
China as one of the world's fastest-growing double-digit growth throughout 2017
economies and the number of rich individuals
and the extent of their wealth are both set to
All of these factors underpin the wealth
grow by more than 85% over the next five
creation of India's HNW elite, as evidenced in
years.
the IIFL Wealth Management Wealth Index
In its biannual publication, India Development 2018, In our first report, India's Quantum Leap,
Update, The World Bank said that India’s GDP we examine the fortune builders: who they
growth is projected to reach 6.7% in 2017-18 are, where they rank among the world's
and accelerate to 7.3% and 7.5% in 2018-19 most-moneyed, how they made their wealth
and 2019-20 respectively. This is in and where Indian HNWIs are from.
comparison with the Chinese economy
growing at a projected rate of 6.3% in 2019.
TABLE OF
CONTENTS
India’s rich list 01
India’s rich outpace global peers 04
How did they make their wealth? 05
A portrait of India’s wealthiest 09
Home-grown talent 11
Building health, reforming wealth 13
Riding to new opportunities 15

INDIA’S
RICH LIST
Indian Prime Minister Narendra Modi was the notes in 2016 in a crackdown on the
choice of the business class and wealthy black-market economy curbed growth and
when he came to power on an anti-corruption consumer confidence at the close of 2016,
platform and pledged to turn India into the according to the International Monetary Fund.
strongman of the global economy. As Chinese But in 2017, investment confidence remained
growth has slowed in recent years, India has strong and our survey has shown that the
overtaken it. The Modi government has vowed wealthy are reaping the rewards of this new
to transform the Indian economy by 2022 phase in India's economic journey to cut
through a manufacturing boom, foreign direct corruption and boost growth.
investment, government investment and,
crucially, job creation. The Wealth Index shows that, even before the
full benefits of reform are felt, India's
The jobs boom has yet to materialise and the super-rich community is growing. Our report
government's recall of all INR500 and INR1000 illustrates that the top wealthy individuals hold
WEALTHY POPULATION GROWTH (HNW+) CAGR 13.3%
2021 F
529,940
2016
284,140
CAGR = compound annual growth rate, F = forecast Source: Wealth-X
01
THE MODI GOVERNMENT HAS VOWED TO
TRANSFORM THE INDIAN ECONOMY BY
2022 THROUGH A MANUFACTURING BOOM,
FOREIGN DIRECT INVESTMENT,
GOVERNMENT INVESTMENT AND, CRUCIALLY,
JOB CREATION.
INR95trn of privately held wealth. The rich India’s wealthy will rise by over 85%. That
within India grew by 9.4% to 284,140 represents an anticipated compound average
individuals between 2015 and 2016 and their growth rate of over 13% a year over the next
wealth rose by 7.4%. Over the past five years, five years.
this HNW population has grown by just under
40%, while its wealth has grown by 37% Such a rate of growth would put their
during that period. accumulated wealth at INR188trn by 2021 and
the number of wealthy people will reach just
But looking ahead, India's wealth creators are over half a million of India's 1.2 billion
about to eclipse even their performance of population – at 529,940 – by 2021. That
recent years. The IIFL Wealth Management represents an increase of 245,800 wealthy
Wealth Index 2018's first report, India's individuals or a rise of 86%.
Quantum Leap, shows that in the coming five
years, both the number and the wealth of
WEALTH HELD BY INDIA’S WEALTHY (HNW+, INRtrn) CAGR 14.7%
2021 F
INR188trn
2016
INR95trn
0 20 40 60 80 100 120 140 160 180 200
CAGR = compound annual growth rate, F = forecast Source: Wealth-X
India’s Quantum Leap | IIFL Wealth Index 2018 02

Who is this elite group - UHNWIs
Individuals with a net worth of more than
of wealthy individuals? INR2bn (USD30m).
Our report categorises them into three groups: Here is how their wealth breaks down:
first, the HNWIs, who account for 94% of the - HNWIs control the largest proportion of
total wealthy Indian population; second, the wealth among the rich at INR41.5trn
very high net worth individuals (VHNWIs), who or 44%.
number 12,460; third, the ultra-high net worth - VHNWIs hold INR13.4trn or 14% of wealth.
individuals (UHNWIs), who account for 4,470
people. - However, the small number of UHNWIs,
who represent 1.6% of the total number of
For this series of reports, the wealthy in India HNWIs, control a vast INR40trn or 42%
are defined as anyone with at least INR65m – of wealth.
roughly the equivalent of USD1m.
We have then analysed the following three
wealth groups:
- HNWIs
Individuals with a net worth between
INR65m and INR650m (USD1m-USD10m).
- VHNWIs
Individuals with a net worth between
INR650m and INR2bn (USD10m-
USD30m).
INDIA’S WEALTHY (NUMBER) VHNW 12,460

UHNW 4,470
HNW 267,210
WEALTH (INRtrn) VHNW 13.4

UHNW 40.0
HNW 41.5 Source: Wealth-X
03
INDIA’S
RICH OUTPACE
GLOBAL PEERS
These figures are remarkable enough but India's wealthy population is expected to be
India's performance is yet more arresting when the 10th fastest growing in the world in a list
compared with that of HNWIs globally. dominated by emerging economic powers,
with Iceland representing the only developed
India's HNW growth of 40% over the past five economy in the top 10. This illustrates how the
years has eclipsed that of its rivals in axis of economic power is tilting away from
economies elsewhere in the world, placing the West and towards the East. When one
India in a league of its own. By comparison, looks at the sheer increase in numbers of rich
the global HNW population and its wealth people per nation, India's story is even more
grew by 3.2% and 4.2%, respectively, over the startling. India is ranked fourth in the world for
same period. the number of new wealthy individuals joining
India's rich are poised to swell in number by the ranks of the rich, coming in behind
87% over the next five years, once again economic behemoths like the US, Japan and
vastly outstripping the performance of the China but ahead of European powerhouse
global wealthy demographic. Globally, the Germany.
number of HNWIs with more than USD1m is
set to increase by 40% over the same period.
% GROWTH OF WEALTH NUMBER OF NEW WEALTHY

IN NEXT 5 YEARS ADDED IN NEXT 5 YEARS
Rank Country Rank Country
1 Philippines 1 United States
2 Argentina 2 China
3 Iceland 3 Japan
4 China 4 India
5 Kazakhstan 5 Germany
6 Nigeria 6 Australia
7 Indonesia 7 Brazil
8 Bangladesh 8 France
9 Kenya 9 Indonesia
10 India 10 Korea
Source: Wealth-X

HOW DID
THEY MAKE
THEIR WEALTH?
With future wealthy generations set to make a WHAT IS THE SOURCE OF THEIR WEALTH?
quantum leap over the next five years, those The vast majority have earned it through their
Indians who are already rich will increase their salaries over time or through the sale of their
fortunes and move higher up the wealth business assets, as well as by investing wisely
ladder as they continue to work and reinvest and managing their personal investments.
in their asset base.
SOURCES OF WEALTH
60%
20%
40%
0%
Savings through earnings/

60%
bonuses/dividends over time
Personal financial
50%
investments
Sale of a business/es
23%
Inheritance 18%
Profit from property 15%
Large bonus 7%
Source: Wealth-X
05
INDIA'S WEALTHY ARE MOSTLY SELF MADE
AND ARE STILL WORKING AS HARD AS EVER
TO BUILD THEIR WEALTH LEGACY FOR THE
FUTURE, WHICH POSITIONS THEM WELL TO
CAPITALISE ON THE OPPORTUNITIES OF
THE NEXT FIVE YEARS.
OCCUPATION BY WEALTH
60%
80%
20%
40%
0%
Business owner/ 87%

72%
entrepreneur 51%
Senior management 7%
in a company 12%
with 1000+ employees 23%
Senior management 4%
in a company 6%
with <1000 employees 9%
Other-level employee 0%
3%
within a company 4%
Non-executive 0%
2%
directorship 1%
2%
Other 5%
12%
UHNW VHNW HNW Source: Wealth-X

An overwhelming 87% of HNWIs are primarily As a whole, UHNWIs are a slightly older
self made, with 18% attributing part of their demographic than HNWIs with just over half
wealth to some form of inheritance. of India's wealthy aged over 55 years and 27%
over the age of 65. But looking at it another
Among UHNWIs, the way, 73% are under 65 and almost half are
under 55, which means this sizeable
overwhelming population can bolster its coffers in future

decades. It seems most of these individuals
majority (87%) are are not ready to simply sit back and enjoy the
fruits of their success – 78% of India's wealthy
business owners or are still working.
Breaking down the wealthy by gender, it is

entrepreneurs, clear that men still dominate the demographic
at 79%. Women represent 21% of the
compared with 52% non-UHNW population but 6% of the UHNWIs
or super rich.
of HNWIs and To summarise, India's wealthy are mostly self
VHNWIs. Most of the made and are still working as hard as ever to
build their wealth legacy for the future, which
wealthy classes (91%) positions them well to capitalise on the
opportunities of the next five years. They are
have less than still invested in their businesses, with just
under 50% well under the age of 55 and so
INR325m in unlikely to be at the point of retirement and
cashing in their fortunes. For these reasons,
investable assets, the Indian rich list is well positioned for the
future compared with their global
with much of their contemporaries.
wealth remaining tied

up in their primary
businesses.
07
DEMOGRAPHIC BREAKDOWN OF INDIA’S WEALTHY
INVESTABLE ASSETS
91% Under INR325m
9% INR325m or more
Working Not working
WORKING STATUS %
78% 22%
GENDER %
79% 21%
18-34 35-54 55-64 65+
AGE %
5% 43% 25% 27%
Source: Wealth-X

A PORTRAIT
OF INDIA’S
WEALTHIEST
Who are the ultra rich of India, those 4,470 world governments and business partners
individuals classed as holding 42% of the seeking investment.
wealth? Understanding this demographic is
crucial because these privileged few hold the Compared with their peers overseas, the Indian
key to vast future prosperity, investment and ultra rich hold a smaller proportion of their
job creation. They are the new economic wealth in liquid assets, with one third invested
maharajahs of India and their investing power in their primary businesses.
means their influence extends beyond their India's UHNWIs are slightly younger than their
home country and into the wider world. global counterparts, with an average age of 58
First, India's UHNWIs are richer than their compared with 62 globally.
global counterparts, holding an average However, not all of them are self made. The
wealth of INR8.65bn compared with the scale of their fortunes – as well as the limits
average equivalent of INR7.8bn for the typical on the availability of investment capital 30
global UHNWI. Wealth-X estimates India's years ago when many of these people were
wealthiest man to be Mukesh Dhirubhai starting out – means many of the UHNWIs had
Ambani, who has a fortune of USD50.5bn or to rely on inheritances to jump-start efforts to
INR3.37trn. Ambani is the Chairman and create more wealth. Around 55% of the
Managing Director of Reliance Industries as UHNWIs relied on some form of inheritance
well as the largest shareholder in the Indian compared with the global UHNW average of
conglomerate. Like Ratan Tata, Ambani is one 34%. Whereas 45% of Indian UHNWIs are self
of the giants of Indian business. He is one of a made, 66% of their global counterparts have
new breed and plays a prominent role on the made their own fortunes.
world stage, as much in demand at the Davos
Economic Forum for his views as he is with
COMPARING INDIAN UHNWIs TO AVERAGE INDIAN AVERAGE GLOBAL

GLOBAL UHNWIs UHNWI UHNWI
Wealth (mean) INR8.65bn INR7.8bn
Liquid assets 14% 35%
Age 58 62
Source of wealth
Self made 45% 66%
Inherited and self made 25% 22%
Inherited 30% 12%
COMPARING UHNWIs TO AVERAGE INDIAN AVERAGE HNW

THE WIDER WEALTHY UHNWI AND VHNW
WEALTHY INDIAN
Age 58 56
Proportion of males 84% 79%
Source of wealth
Sale of business(es) 41% 19%
Savings through earnings/bonuses/dividends over time 22% 37%
Personal financial investments 13% 14%
Inheritance 11% 12%
Source: Wealth-X
09
AREAS SUCH AS BANKING AND IT ARE
ALREADY THE MAIN WEALTH GENERATORS
FOR NON-UHNWIS. PERHAPS THIS ALSO
OFFERS A CLUE AS TO WHICH SECTORS OF
THE ECONOMY WILL DRIVE WIDER WEALTH
CREATION IN THE COUNTRY.
Their geographic spread is dominated by two greater availability of capital as India's

cities – the financial and political capitals financial services and banking sectors have
Mumbai and New Delhi respectively – but this matured, empowering a new generation of
is changing. More than one third of this entrepreneurs and businesses that have not
powerful wealthy elite has its main business in had the advantage of inherited money. In
Mumbai. However, the ultra rich are present in other words, new money will be edging old
a large number of economic hubs across the money aside in India increasingly as an
country, showing a blossoming in diversity. emerging meritocracy is unleashed by the
wider availability of capital. This pattern is
New industries rising up across India are seen in the emerging sectors favoured by
driving this new pattern of wealth creation. At non-UHNWIs. Areas such as banking and IT
present, manufacturing accounts for the lion's (information technology) are already the main
share of industries creating UHNW wealth. And wealth generators for non-UHNWIs. Perhaps
yet, new fortune builders have emerged and this also offers a clue as to which sectors of
are growing stronger in business services, the economy will drive wider wealth creation
technology, healthcare and financial services. in the country.
These industries have been boosted by the
TOP PRIMARY INDUSTRIES
Manufacturing 38%
and industry 20%
3%
Business
services 17%
5%
Financial services/
banking and finance 16%
12%
Healthcare
7%
Information 2%
technology 6%
UHNW VHNW and HNW
Source: Wealth-X

HOME-GROWN
TALENT
India's Quantum Leap reveals that the talent Harvard. Those who are educated abroad tend
behind India's economic powerhouse is mostly to bring their expertise back home. The main
home grown, not imported. Indian universities education-related findings are:
have educated a new generation of
entrepreneurs and wealth creators who are - International universities tend to be
driving growth, creating jobs and choosing to favoured by those under the age of 35
reinvest in their country. When Indian - While 58% of the wealthy obtained a
graduates have made their fortunes, our master's degree, 2% did not attend
survey shows they are likely to invest in areas university at all
such as Indian property. - Despite some individuals having foreign
connections, the wealth outside of their
The wealthy classes of India attend domestic
primary businesses tends to be reinvested
universities, with many favouring institutions
in India, particularly in property
such as the University of Mumbai, Indian
Institute of Management, University of Delhi, - Some 91% of the wealthy who own a
Savitribai Phule Pune University, Institute of second property buy in India
Chartered Accountants of India and Indian - And 6% own a property in the Americas
Institute of Technology, Kanpur. These are the and 4% own in the UK
primary incubators of wealth creation in India. - Foreign property ownership occurs once
the wealthy reach VHNW or UHNW status
Only 19% of India’s wealthy attended an
international university, with top choices
including leading US institutions such as
TOP UNIVERSITIES ATTENDED BY THE WEALTHY
International 19%
Indian 79%
University of Mumbai 26%
Indian Institute of Management 10%
University of Delhi 9%
Savitribai Phule Pune University 4%
Institute of Chartered Accountants of India 4%
Indian Institute of Technology, Kanpur 3%
Source: Wealth-X
11
INDIAN UNIVERSITIES HAVE EDUCATED A
NEW GENERATION OF ENTREPRENEURS AND
WEALTH CREATORS WHO ARE DRIVING
GROWTH, CREATING JOBS AND CHOOSING
TO REINVEST IN THEIR COUNTRY.
These findings signify that the country's Perhaps, as India's base of ultra-wealthy
economic boom is very much 'made in India'. individuals widens in the future, this pattern of
The wealthy are, on the whole, highly foreign study and ownership of overseas
educated, with 58% educated to master's level. assets will become more pronounced. In the
Notably, the fifth of those who study abroad years to come, the spending power and
tend to be in the very top wealth bracket of influence of India's most wealthy HNWIs will
HNWIs and have a preference for investing extend around the world. This spending power
abroad, in assets such as property, once their is already being wielded in the property and
fortunes are secure. luxury goods markets of cities such as London,
New York, Paris and Dubai. The Indian wealth
factor has only just begun to make its impact.
LOCATION OF SECOND HOME/INVESTMENT PROPERTY
India 91%
Americas 6%
Asia excluding India 5%
UK 4%
Other 5%
Source: Wealth-X

BUILDING
HEALTH,
REFORMING
WEALTH
DR BS AJAI KUMAR
Chairman and CEO, HCG
13
Dr BS Ajai Kumar is a man of vision who has 2016,” Dr Ajai Kumar said in an interview.
transformed the lives of hundreds of “We’re a small-cap and we’re in a sector –
thousands of people, while building the most healthcare – which is not facing a downturn.”
successful cancer care company in India. Indeed, demand is growing as foreigners see
HCG is proud to deliver world-class treatment India as a health tourism destination, offering
that rivals the best in America or Europe. cheaper and effective healthcare provision.
This was always the dream of this son of a Back in 2016, HCG had 16 cancer centres.
lawyer and a homemaker, who wished to Today it has 21 in India and sees 6,000 new
introduce pioneering cancer care to his own patients each year and 300,000-400,000
country after spending decades specialising in repeat patients. Now HCG is turning its eye to
oncology in the US. Dr Ajai Kumar was born in overseas expansion: “Today we are looking to
Bengaluru and trained in the US, but his dream expand internationally into the Middle East,
was very much made in India, during an Africa and Southeast Asia.”
economic liberalisation that began in the early
1990s. This is evidence of the company’s confidence
in the economic outlook at home and
India’s transformation is thanks to the overseas. When it comes to the economic
entrepreneurial drive of people like Dr Ajai potential of India, Dr Ajai Kumar believes that
Kumar, who spotted a gap in the market in the the private sector has transformed India,
1980s whilst visiting from America where he despite the corruption and failures of the
was working as a cancer expert. As he government: “What India has achieved today
travelled around India, he saw there was no is down to enterprise. The government has
cancer-care service available to ordinary been an impediment to India. It has been
people. spreading poverty; giving subsidies is like
giving opium to the people. The people of
His business plan from the outset was founded India are capable of a lot. What prevents us
on the belief that the private sector could from doing even more is the system.”
work more effectively than the state. Cancer
treatment was enormously expensive and He believes that for India to truly meet its full
required a huge amount of R&D, so the only potential, it must reform state subsidies, tackle
way to make it financially viable for ordinary corruption and unshackle the poor to allow
Indians was to create a company on a vast them to ascend the economic ladder: “Don’t
scale, thereby cutting the unit costs of care to get me wrong, India’s economy will continue
an affordable level. to boom as it will be driven by the
300-million-plus middle class, people above
HCG’s big breakthrough came in the form of the privilege line. But we have a social
one of India’s richest men, Mr Azim Premji, obligation to bring greater parity. You cannot
another Bangalorean and the business titan have a vast majority left behind – slums next
who founded IT company Wipro. He decided to five-star hotels. What is going to happen
to invest USD5m in HCG. “We went public in one day? This is what bothers me most.”

RIDING
TO NEW
OPPORTUNITIES
APRAMEYA RADHAKRISHNA
Founder, TaxiForSure. Now a business angel
15
The story goes that the idea for TaxiForSure, as a head of business development and one
the start-up that sold for a USD200m of the biggest problems was always getting
stock-and-share deal in 2015, was born in a from point A to point B. When my partner and
pub in Bengaluru one night after work. I were deciding on a start-up, this came up
Aprameya Radhakrishna and his partner were front. We quit our jobs and started to work on
pondering the difficulty of transport in their it. Once launched, we started growing fast;
home city and thus, over a pint, a the need for our service was very high.
multi-million-dollar idea was born. Convenience is what it’s all about today.”
So began the journey that led to TaxiForSure, By the time he sold his business, it had grown
which quickly found itself overwhelmed with from two people to 2,000 employees and
demand for a service that aimed to make a 10,000 drivers nationwide. It operated in 48
cab ride as cheap and easy as hailing a cities and was attracting the attention of
rickshaw. The app was up against competition Silicon Valley. Radhakrishna invests today in
that included the big beasts Uber and Ola, the the next big thing and believes it is this
latter of which eventually took over entrepreneurial verve that has to be unleashed
the company. among all sections of Indian society in order
for the country to achieve its real economic
Today, Radhakrishna has cashed in the spoils potential: “I’ve benefitted from the ecosystem
of that first entrepreneurial effort and is that existed in India: business backers for
working as a business angel to help the next good ideas. I want to help others now,"
generation of Indian moguls. His message to Radhakrishna says.
those starting out is that you don’t need to be
a Tata or a Birla to make it big in the new “The biggest opportunity for India is to enable
liberated India: “I’m from Bengaluru and my people to come out and start businesses,
family is all from there. My father is a believe in themselves and increase the GDP
professor in physics and my mother is a growth rate. We’re a pretty young country so
homemaker,” he said in an interview. “In my we need to inspire youth to live up to their
family there was no businessman, no person maximum potential.”
who had taken a risk in a business and
actually done well. That in itself was a big In order to deliver, Radhakrishna believes India
challenge in the beginning: convincing my faces a number of challenges to its economy;
own family. It took me a year to convince my the most compelling is to improve
parents, quit my job and start working from my infrastructure – both physical, such as
parents’ house.” transportation, as well as digital. On this, he
believes India lags China: “India needs to
The rest is history, as they say. Radhakrishna increase the pace of growth and development
recalls how his past career in real estate and of both physical and digital infrastructure to
even a stint at Infosys whetted his appetite to achieve full potential. We don’t want to be left
create something of his own: “I used to travel behind because we’re not hungry enough.”

THE INVESTOR MINDSET
PART 02
IWI

PART 02
THE INVESTOR
MINDSET
Welcome to the second report in the IIFL Wealth Management Wealth
Index 2018 series.Throughout the series we have partnered with
Wealth-X to provide a new perspective on the people that make up
India’s high net worth (HNW) and ultra high net worth (UHNW)
populations.
This second report of the three-part series was again compiled using
Wealth-X’s exclusive and extensive database of hand-curated
intelligence, and a survey of more than 500 wealthy Indians.
In this report,The Investor Mindset, we explore the aims and concerns
of the wealthy in India and how these are affected by the fast-growing
economy and rapidly changing country. As many of us start to think
about the future beyond work, we explore what our typically hands-on
approach can mean for our wealth, families and businesses, and
discuss what matters to us in wealth management.
We’d also like to thank Oliver James, the esteemed psychologist and
writer, for his valuable contribution focusing on the psychology of
wealth, and the Taparia family, for speaking to us about the life of their
business and how the way they use their wealth has evolved.
We hope that you find this report informative and interesting, as well as
a little challenging!
Yatin Shah
Founder and Executive Director
EXECUTIVE
SUMMARY
Confidence is king for investors and India’s With the safeguarding of wealth at the front of
wealthiest people have it in abundance. Nine their minds, these high net worth individuals
out of 10 of India’s wealthy elite are upbeat (HNWIs) attach great importance to managing
about the future of the Indian economy and their money, even though they are time poor.
this is sure to drive their choices about where Incredibly, these fortune builders admit that
they invest in the coming years. although protecting their wealth remains a
priority, many lack a thorough understanding
Despite economic and political uncertainties of all investment asset classes. In some cases,
on the horizon, India’s wealthy believe the they admit to little or no understanding at all.
future is bright not only for India but the world
economy too. That confidence translates into a
powerful sense of economic destiny, with 96% Thus, the investment advisor plays a pivotal
of those surveyed believing they will achieve role in the wealth management of those we
their goals in the next five years. Their primary surveyed - a trusted advisor is required to
aim is pretty simple: achieving financial growth educate the client as well as offer investment
year in, year out. performance. India’s wealthiest people ‘on
average’ employ two wealth managers and
But if there is one thing that does keep the their primary criteria for choosing them are a
super confident, super rich awake at night, compelling investment track record and an
however, it is the fear of losing money. Two impressive company reputation.
fifths of those surveyed in the IIFL Wealth
Management Wealth Index 2018 said they The Indian wealthy may have a fiercely
were afraid of just such a scenario, closely domestic focus in business but,
followed by a concern about succession when it comes to choosing an investment
planning and the broader economic outlook. advisor, their search for the very best is
influenced by the global outlook the
wealth manager can provide.
TABLE OF
CONTENTS
What keeps the wealthy awake at night 01
Staying wealthy 04
Investment planning: Asset rich, time poor 05
Reputation, reputation, reputation 07
Originators and inheritors: the different 09

pressures of wealth
Engineering a success story 11

WHAT KEEPS THE
WEALTHY AWAKE
AT NIGHT?
The wealthy Indian’s outlook may be global having long been a centre for Islamist
but their primary focus is domestic. Just as extremism and the threat of jihadi attacks. In
domestic economic potential is driving their 2016 India suffered numerous terrorist attacks,
ambitions in wealth generation, it is the the third highest in the world after Iraq and
domestic arena that provides the greatest Afghanistan, according to the US State
areas of concern with regard to risk for India’s Department’s Country Report on Terrorism.
wealthy elite. More than half of the attacks were centred on
four states: the northern disputed territory of
Despite 89% declaring confidence in the Jammu and Kashmir, where there has been a
future of the economy based on the irresistible militant Islamist insurgency for decades;
force of growth transforming the country, Chhattisgarh and Jharkhand in the east,
India’s wealthy harbour political fears both at where there is a Maoist Naxalite insurgency;
home and abroad. If these issues were to be and the far north-eastern state of Manipur,
resolved, their levels of confidence would soar which is suffering another separatist
even higher. insurgency. India experienced a 16% rise in
What are the issues that keep the rich awake terrorist incidents in 2016 and the number of
at night in India? First, on the home front, their people killed rose by 17%. So, clearly, the
biggest worry is terrorism; with south Asia concern is well grounded.
TOP CONCERNS
Threat of jihadi terrorism 77%
Societal issues in India 73%
India’s relationship with 70%

Pakistan
Currency volatility 62%
Donald Trump as President

of the United States 52%
Chinese expansionism in
the South China Sea 51%
Breakup of the 50%

European Union
0% 20% 40% 60% 80%
Source: Wealth-X & IIFLW survey
01
DESPITE 89% DECLARING CONFIDENCE IN
THE FUTURE OF THE ECONOMY BASED ON
THE IRRESISTIBLE FORCE OF GROWTH
TRANSFORMING THE COUNTRY, INDIA’S
WEALTHY HARBOUR POLITICAL FEARS BOTH
AT HOME AND ABROAD.
Second, on the domestic front, India’s wealthy powers to war three times and is the issue at
are worried about societal tensions within the the heart of a decades-long Islamist militant
country, which is undergoing momentous insurgency in the state, which India blames on
economic and social upheaval as it transforms its neighbour. If there is one geo-political issue
from a rural to a modern urban economy. that has always held the potential to threaten
These tensions are manifesting in various ways India’s economic stability, it is this one.
– inter-religious tensions, violence against
women and socio-economic division as Fourth, beyond south Asia, India’s wealthy also
disparities in wealth become stark – and are cited a number of international issues that
evident daily in the news. they saw as a threat to stability and prosperity,
although secondary to those cited above.
Third, the historically tense relationship with Foremost is the Trump presidency and its
neighbouring Pakistan endures as a nagging ensuing uncertainties. Along with the
political anxiety. Since partition and apparently warm relationship between the
Independence in 1947, India and Pakistan political strongmen at the helm of both
have retained a volatile relationship over the countries, with Donald Trump’s ‘America First’
disputed Muslim-majority Indian state of and Prime Minister Narendra Modi’s ‘India First’
Kashmir, which Pakistan wishes to claim as its agendas, they have much in common.
own. The issue has taken the nuclear-armed
FINANCIAL PRIORITIES
Growth (to increase the real value of your investments as much as possible) 64%
To generate an income 44%
Wealth preservation (maintain the nominal value of your investments) 43%
To pass on wealth (to the next generation or philanthropically) 31%
To spend/for enjoyment 18%
The Investor Mindset | IIFL Wealth Index 2018 02

Fifth, neighbouring China’s expansion in the invested. As a consequence, despite the
South China Sea is also a worry. India and background noise of the domestic concerns,
China remain rivals for geo-political and investors remain bullish with 95% saying they
economic supremacy in the region. India is have considerable confidence in their own
viewed by the US as a powerful ally in the ability to hit their financial targets. Two thirds
region to counterbalance the growing expect to achieve financial growth and 44%
economic and political might of China in the see this as their top priority.
Asia-Pacific theatre. On one hand, China is a
potential concern; on the other, it is also one
The older, the wealthy individual, the more
of India’s largest trading partners – so a stable
true this is, particularly for those over 55 years
relationship between the two giants is crucial
of age. The ultra high net worth individuals
for not just regional but world prosperity.
(UHNWIs) are the most bullish of all, with 99%
expressing extreme confidence in their ability
Sixth, investors are worried about the potential to achieve their goals.
break-up of the European Union as it faces
existential threats stemming from the rise of
While the rich remain supremely focused on
far-right groups within Europe, a weakened
generating bigger fortunes, they are less
euro after the financial crisis and a questioning
motivated to spend their money. Just 18% said
of the European project itself in many member
spending and enjoying their money was a
states amid tensions caused by rising
priority, contrary to the popular image of
inequality and immigration. The challenge to
this demographic.
the European order was encapsulated in the
outcome of the 2016 British referendum to
leave the EU. Germany and the UK are among Those who are new entrepreneurs tend to be
India’s largest trading partners. focused on the job at hand, while the
inheritors are more keen on spending their
spoils. As the rich become older, wealth
And yet despite these weighty matters of
preservation becomes more important than
global concern, only 8% of India’s wealthy
generation and spending. Among the retired,
believe that international affairs will be more
44% are preoccupied with just holding on to
important than domestic issues when it comes
their riches.
to future wealth generation.
Most of those surveyed said events in India

had an equal or bigger impact on their future
– after all, India is where they are mostly
03
STAYING
WEALTHY
The domestic and geopolitical backdrop aside, 39% of the top tier of wealth generators in
what is the number-one fear of the wealthy? India saw this as a priority.
It’s quite simply losing their fortunes, so wealth
preservation is paramount. Despite a - Some 82% already have or are planning to
burgeoning confidence in their ability to make put in place a succession plan
money, two fifths of those surveyed said they - Women, those aged 55+, very high net
were worried about losing their wealth. worth individuals (VHNWIs) and UHNWIs
This was a particular concern for women, are all more likely to have a plan in place
HNWIs and those whose wealth is tied up in already, which suggests both a longer-term
property. However, for those whose wealth focus and a sense of immediacy
was made through the sale of their business, it - One in five HNWIs has no succession plan
was less of a worry because they have in place
already cashed in and feel less exposed to the
prevailing risks of the business environment Finally, the broader economic environment
that could affect a single company or industry. inevitably remains something that all business
people think about. It was cited particularly by
After losing their money, the next most men, with 19% raising this as a concern,
significant worry is about who takes over their compared with 5% of women. Age is another
fortunes: succession. One fifth of our survey factor in considering the economic outlook. In
of India’s most wealthy said succession particular, it was a key factor for those aged
planning was their next biggest headache. The under 55, who are still in the process of
richer our respondents, the more likely they building their fortunes.
were to set a succession plan in place, indeed
BIGGEST CONCERNS REGARDING WEALTH
Ranked 1st Ranked 2nd Ranked 3rd

50%
45%
40% 39% 39%
40%
35% 32%
30% 20% 20% 17%
25% 23%
16% 21%
20% 8% 6%
15% 11% 13%
11% 10% 10%
12% 10% 8% 3%
10% 2% 6%
4%
5% 9% 9% 11% 4% 2%
4% 5% 7% 6% 4% 2%
0% 2%
Losing Sucession Economic Retirement Physical Day-to-day Being taken Pressure Social
money planning environment safety/security responsibility advantage of to leave perceptions
a legacy of the wealthy

INVESTMENT
PLANNING:
ASSET RICH,
TIME POOR
Brilliant at making money, India’s wealthy elite respondents admitted that they did not trust
are out of their comfort zone when it comes others to make financial decisions for them.
to managing their wealth. While they are cash
and asset rich, these people are time poor and Notably, those whose primary financial goal is
require external advisors to help them manage to increase their wealth are more trusting, with
their fortunes and preserve their wealth. 78% prepared to hand decision-making to
others. The inheritors tended to be less
Yet this is not an indicator of apathy. An trusting, with almost half saying they would
overwhelming 86% of wealthy Indians check not devolve such decisions to outsiders.
on their investments regularly and 97% of Within the demographic, some interesting facts
UHNWIs do so. The pattern appears to be that emerged:
the more liquid the assets, the more the
portfolios are checked, with more steady - Women are more willing to bestow trust
assets such as property or precious metal than men
being less of an ongoing concern. - Men and those aged under 55, in
Long working hours and the challenges of particular, are more likely to want an
building up business empires means that 60% advisor to challenge their ideas. This
of the wealthy in India do not have time to indicates that while they want their
manage their own investments. This is advisors to be proactive in their investment
particularly the case among the women strategy and to initiate ideas, the wealthy
surveyed and also HNWIs, who are still earlier want to be active in the decision-making
in the curve of their business career. process.
This high level of engagement – or checking - Some 77% of men welcome challenges to
up on portfolios – stems from an inherent their ideas compared with 59% of women
mistrust of devolving responsibility for wealth
management to a third party. One third of
REGULARLY CHECK ON HOW DON’T HAVE TIME TO MANAGE

INVESTMENTS ARE PERFORMING INVESTMENTS
60%
86%
05
THOSE WHOSE PRIMARY FINANCIAL GOAL
IS TO INCREASE THEIR WEALTH ARE MORE
TRUSTING, WITH 78% PREPARED TO HAND
DECISION-MAKING TO OTHERS.
And yet despite wealthy Indians’ reluctance to - Some 15% admit to having little or no
hand over responsibility for managing their understanding of investment funds
wealth, they recognise a devolvement of
power is necessary for them to receive the - The best understood asset class is equities,
professional help they need. Their with 42% claiming to have either very
understanding of different asset classes is good knowledge or professional expertise
modest, with less than half admitting to a in this area
good understanding of equities or investment - But less than 20% have a good grasp of
funds. Investment funds are capital owned by structured products or private equity (18%
numerous investors pooled to purchase stocks, and 15% respectively)
shares and other investments. This includes
mutual funds, managed funds, collective - Almost half of India’s wealthy (45%) confess
investments, unit trusts, tracker funds and to a poor understanding of private equity
exchange-traded funds, among others. This
knowledge gap is all the more marked given Those groups with the best knowledge across
that 84% hold at least some of their wealth in all investment asset classes, including equities
investment funds, yet close to 60% do not and private equity, are men, UHNWIs and
have a good understanding of how these those under the age of 55. The UHNWIs stand
work: out for their superior knowledge and this is a
reflection of their high level of engagement
- Of those invested, less than half (43%) have with their portfolios.
good understanding of the asset class
UNDERSTANDING OF ASSET CLASSES
Good understanding Poor understanding

50%
40%
30%
20% 42%
38% 32% 18% 15%
10%
0%
-16% -15% -20%
-10%
-37% -45%
-20%
Equities Investment Real estate
-30% funds
-40%
Structured
-50% products
Private equity

REPUTATION,
REPUTATION,
REPUTATION
If you’re a wealthy Indian looking for an While rich Indians are focused on the
investment manager to grow your fortune, domestic economic agenda, they are not
what do you look for? Reputation. necessarily going to choose an international
company to look after their money, with just
For the super wealthy, an investment 3% saying this was a priority. Instead, prestige
company’s standing and track record are the is paramount for 55% of the wealthy. In other
foremost criteria when it comes to appointing words, they want a world-class performer.
a wealth manager. Outstanding investment
performance was ranked first by 58% of India’s Fees also attract close scrutiny among the
richest individuals when choosing the best HNWIs, with this becoming increasingly
person to manage their wealth. important as we travel up the wealth ladder:
the richer the client, the more mindful they are
They also want an investment manager who of how much of their money is being eaten up
offers the full portfolio of investment asset by fees.
classes, with 37% citing this as a factor in their
decision making.
MOST IMPORTANT FACTORS WHEN CHOOSING A WEALTH MANAGER
Their investment performance track record 58%
The prestige and reputation of the firm 55%
The breadth of investment products/choice 37%
The level of fees/charges 30%
They have office local to me 20%
They already manage my family’s wealth 17%
A personal or professional referral 14%
It is a domestic firm 11%
They have a global presence 6%
It is an international firm 3%
07
OUTSTANDING INVESTMENT PERFORMANCE
WAS RANKED FIRST BY 58% OF INDIA’S
RICHEST INDIVIDUALS WHEN
CHOOSING THE BEST PERSON TO
MANAGE THEIR WEALTH.
The issue of continuity of service by Opaque advice is a real turn-off for the rich.
investment managers also seems to be a Clear information about the portfolio structure
prevalent concern among the wealthy, those was important to 96% of those surveyed and
who have already retired and those who have clear information on the nature of the
inherited an advisor who has long-term investments was important to 99%. Fee
responsibility for managing the family transparency is just a little less important, cited
wealth. In such cases, loyalty to the status by 84% of the wealthy in general, but this
quo is important. becomes ever more important to the most
wealthy UHNWIs.
Indeed, it would seem that wealthy Indians
generally wish to maintain a stable relationship What kind of services are the super rich
with their advisors – once a wealth manager looking for?
has been appointed, the average tenure of
service is around six years. The wealthiest - Eighty-eight percent want investment
Indians and those aged over 55 are likely to management advice
have spent more than five years with the same - Just over half want tax planning, with this
advisor. If it works, don’t fix it. being a particular focus for women
In total, 55% use just one wealth manager. But - UHNWIs seek trust and estate planning
the richer the individual, the more likely they
are to have multiple advisors to manage their When it comes to organising events for the
fortunes. UHNWIs are significantly more likely wealthy, our research shows that the most
to engage three or more wealth managers, popular offerings from investment companies
whereas the majority (82%) use one or two. are special speaker sessions and conferences
with industry leaders. For such events, 64%
What makes a client stick with the same said they would make time to attend. In
advisor for a long period is transparency. particular, our investors said they wanted to
hear from those with holdings in primary
businesses or real estate.

ORIGINATORS AND
INHERITORS: THE
DIFFERENT PRESSURES
OF WEALTH
OLIVER JAMES
Psychologist
09
For a newly wealthy Asian client of mine, There is sometimes an intergenerational clash
making sure his millions were safely invested of values. Many wealthy Indians attended an
was his main priority. He suspected his social Indian university, often with a focused plan for
networks did not sufficiently overlap with the self-advancement. In comparison, their sons
global elite who know how to find the ‘right’ and daughters may seem like fun-seeking
sort of people to look after their capital. He hedonists. Meeting the younger generation of
was plagued by the feeling that he did not fit Indian delegates at the IIFL DIVE (Decoding
into the high-end social circles in which he Investments, Ventures and Entrepreneurship)
was now moving, that he lacked the event in 2017 in Goa, what struck me was
necessary social graces. how torn they felt between their parents’ and
their peers’ aspirations.
As someone used to micromanaging his
business, he felt great reluctance to trust They had been sent to mostly British or
someone else to look after his money. American universities where they had been
Whereas more long-established wealthy peers exposed to a more individualistic mentality.
seemed at home with the world of financial Teenagers and young adults in those countries
advice – having often been to the same are expected to break away from parents and
schools and universities as their advisors – that develop their own views. Yet Indian parents
world made him uneasy. are traditional collectivists, their children’s
identity is conferred upon them by virtue of
Contrast this with the concerns another client gender and place in the family. Filial obligation
brought to me. He was the grandson of the is stressed more in collectivist societies, much
creator of a household-name product. A less so in individualistic, Western ones. The
search for meaning in his life was far more problem was especially acute for daughters.
important than the preservation of his wealth
or social belonging. He agonized about how At their universities they had been exposed to
to make charitable donations that would be temptations. Back home, they were struggling
truly effective and how much of his time to to fit into the traditional role expected of
devote to his chosen profession, teaching. women. On top of this, they were torn
between wanting to compete with their
Compared with developed nations, many more brothers in business and the impulse to be a
of the wealthy in the emerging nations are first traditional housewife.
or second generation. This creates a different
psychology. If you or your father witnessed or The greatest challenge for a wealthy Indian is
began life in a family where food, shelter and to allow themselves to relax and adjust to their
medical care were scarce, it is bound to make new material circumstances, so different from
you more focused on hanging on to your the ones which may have faced previous
money. If it’s been in the family for generations. If it is only one or two
generations, it’s less likely to be the first generations ago that their family was in a
concern. struggle for survival, it can be hard to feel safe
and secure. Yet what could bring more
Feeling unsafe – insecure – is what keeps happiness than to be able to feel you have
HNW Indians, in particular, awake at night made a good life for your children? Worries
more than anything because so many have about losing your money and lack of social
first-generation wealth. Financial security is far status should not be allowed to interfere
above all issues. Then comes protection from with realising that life is to be enjoyed,
danger to themselves and their family. This is not endured.
closely followed by worries about the
misfortunes that could befall children, most Oliver James is the author of many books and
notably, their becoming lazy, louche and a therapist and coach with a private practice,
married to the wrong sort of partner. based in Oxford but mainly working online
through Skype.

ENGINEERING A SUCCESS STORY
JYOTIPRASAD TAPARIA
Founder, Famy Care
11
“Entrepreneurship runs in our blood.” These deal in 2015 but, if you look at the growth
are the words of Sanjeev Taparia, son of projections, it is clear why the company saw
Jyotiprasad Taparia, the man who took his long-term value. Global contraceptive sales
family’s small engineering business and turned are expected to reach USD24bn in 2018 and
it into Famy Care. The global player in the are growing at a compound rate of 6% a year.
contraceptives market was sold for USD800m A staggering 15% of oral contraceptive pills
in 2015 to its American partner Mylan. It was used by women around the world are made
an audacious finale for an Indian start-up that by Famy Care.
sprang from humble Rajasthani roots.
Thus, the company that gave women the
Taparia Sr taught his sons well in the art of freedom to control their own fertility has
entrepreneurship. It was his heirs, Sanjeev and endowed the Taparia family with a vast
Ashutosh, who spearheaded Famy Care’s entry fortune after divestment. IIFL Wealth
into export markets, notably the US. But the Management is its main wealth advisor and its
move to make female contraceptives was money is housed in a mix of equities, real
Jyotiprasad’s inspired decision back in 1990. estate within India and private equity. New
At the time, India imported intra uterine projects that have caught Taparia’s imagination
contraception (IUD) devices and was looking include building a chain of Indian pharmacies;
for a national manufacturer. Taparia Sr was partnering a global nutraceutical giant and
looking to diversify beyond textile making that a huge brand in India; creating a
manufacturing, hand tools and magnets. After pharmaceutical company with a focus on
completing his degree in science at Calcutta difficult-to-manufacture generic products. The
University, the ambitious young graduate journey continues.
found his inspiration and Famy Care was born.
Taparia believes in India so fervently that
Taparia partnered with a Finnish company, almost all his money is tied up here and his
LierasOy. Sales began to grow in India, a investments outside the country are
country with the second largest population “miniscule”.
after China and a fast-growing demographic.
His products came of age. More women were He says: "India is a great country and the
entering the growing economy and better growth opportunities are very high. The next
awareness of sexual health and family decade will be India’s. I see growth rising from
planning meant demand for Famy Care's 7.5% in 2018/19 to 9% over the following three
products was set to explode. It was a market years.”
dynamic that would be replicated globally.
What risks lie ahead? The next Indian election
“At the time we looked to expand into Asia is foremost in his mind as business craves
and Africa, there were a few multinationals but stability more than anything. This is followed
no emerging-market players,” says Taparia. by inflation and oil prices rising. Taparia
“That played to our advantage. Being Indian, believes that last year’s worries about the
our quality was comparable to, say, Pfizer's, Trump presidency – from US protectionism to
but our price was extremely competitive.” foreign affairs stand-offs – are “overblown”.
The US and Europe are recovering nicely, but
Taparia also took the key decision to expand India is where his heart and money lies.
into injections and oral contraceptives and
that helped deliver the growth leap required. Taparia's future as an UHNWI is one involving
careful management of his fortune,
The business rationale was taken to the US in philanthropy and impact investment,
2008 by his sons, who linked with Mylan, particularly in the fields of education and
which funded an ambitious R&D programme. healthcare.
Mylan bought out Famy Care in a generous

SHAKE UP THOSE ASSETS
PART 03
IWI

PART 03
SHAKE UP
THOSE ASSETS
Welcome to our third report in the IIFL Wealth Management Wealth
Index 2018 series.
In this report, Shake Up Those Assets, we look into how the wealth held
by our economic dynamos is structured and what their priorities are for
the future. Evolving how we manage and invest wealth is crucial to
India’s future, but so is how we use it for good, both philanthropically
and by cultivating future entrepreneurship.
How we look beyond our borders and become more international with
our money is of interest to many of us. Opening our assets to global
markets has been a rising trend and finding the right people to help
guide us through this, whilst also making the most of opportunities at
home, is the clear challenge both to the wealthy and their advisors.
Our partnership with Wealth-X on these reports has provided a different
view on high net worth (HNW) and ultra high net worth (UHNW)
Indians. All three reports have been based on Wealth-X’s exclusive and
extensive database of hand-curated intelligence, and a detailed survey
of more than 500 wealthy Indians.
We’d like to thank Jason Butler, Financial Times columnist, for his
perspective on the responsibilities of planning to enable our wealth to
cope with the various demands that are put on it. We would also like to
thank Som Prakash Goenka for taking the time to share the Goldiee
Masale story with us.
Anirudha Taparia
Executive Director
EXECUTIVE
SUMMARY
The Indian economic story is a keystone for This leads on to another unexpected and
global growth and, for that reason, everyone is fascinating theme that has emerged from this
invested in the outcome. As the number of powerful demographic: money is not the sole
super wealthy in India is set to rocket over the motivator. India’s wealthy also want their
coming years, how this elite club invests is investments to pack a social punch at home
central to understanding how India will deliver and to be part of the story of strengthening
the next stage of its economic renaissance. India. This so-called impact investment is
Investors are ready to shake up their assets. viewed as being on a par with philanthropy,
which remains a major driver of social change
Our survey shows that India’s wealthy are not in the country. In fact, to many of this rich
afraid of risk but they are careful to manage it group of individuals, it is better than charity.
by adopting a diversified and sophisticated Impact investment is the responsible business’s
strategy for their financial investments. High holy trinity, offering financial returns, economic
net worth individuals (HNWIs) seek to achieve growth and social impact in one deal. In other
growth via a spread of asset classes, the words, the rich get a return while making
largest of which are investment funds, direct India stronger.
equity holdings and fixed income. But the very
top tier of wealth-holders, the ultra high net Our survey also shows that while wealthy
worth individuals (UHNWIs), are more heavily Indians want to make their mark at home,
invested in their own businesses, usually there is no doubt that their realm of influence
within India. will extend globally. As they move towards the
top of the global wealth league table in the
As their wealth accumulates, HNWIs intend to coming five years, many will be looking to
ramp up their stakes in investment funds and increase their international investments. The
other financial products in the coming power of the global rupee is already felt in
year but they believe they are top heavy in international property, foreign direct
real estate. investment (FDI) and luxury goods, whether
designer clothes, watches, cars or jewellery.
And with the Indian government focused on One in three of those surveyed said they
stimulating greater entrepreneurship, the super intended to further diversify their investments
wealthy are keen to get in on the act and abroad in the future.
invest in those forging India’s economic future.
While the risks of investing in such new Thus, the global Indian’s spending power is set
ventures may be greater than in established to pack an even greater punch both at home
businesses, so are the rewards. This and abroad.
demonstrates that the next phase of India’s
economic growth and entrepreneurship will
be powered partly by existing fortune builders.
Old money will act as an enabler for
new opportunities.
TABLE OF
CONTENTS
Show me the money 01
Property out, start-ups in 04
Risk and (social) reward 06
A mature approach to family wealth 09
A world of spice, money and God 11
Methodology 13
SHOW ME
THE MONEY
Like Jerry Maguire’s football-player client in These pooled investments tend to be more
the Tom Cruise blockbuster movie, India’s popular with the HNWIs than the top tier of
super wealthy have just one mantra on their rich Indians; the very high net worth individu-
mind when it comes to investment: show me als (VHNWIs) and UHNWIs, who are more likely
the money. to invest in and hold at least half of their
wealth in their primary business. One in five of
This demand to make their money work harder the ultras holds even more than half of their
means an asset portfolio shake-up is coming wealth in their own business, compared with
in 2018/19. They reckon the best place to just 4% of non-UHNWIs. That may be because
book those returns right now is investment they are still in the process of building their
funds, followed by equities and fixed income. companies and fortunes and, therefore, need a
Investment funds make up almost one third of more diversified investment asset base.
the total assets held by the super wealthy and
84% hold at least some of their fortune in
these funds. One in five holds more than half
of their wealth in investment funds.
ASSETS OF INDIA’S WEALTHY
Investment funds 1% 1% 1%
Equities
3% 3%
Fixed income investments 5%
Investment property 6%
Holding in primary business

Cash deposits and savings 9% 31%
Alternative investment funds

Proportion of
Investment in other businesses
10% total wealth held
per asset class
Structured products
Private equity
13% 16%
Precious metals
Tangible assets
01
GLOSSARY OF TERMS - Fixed income investments – investments
such as government and corporate bonds
- Holdings in primary business(es) – the value that typically pay an interest or return on
of a person’s wealth within their primary capital lent over a set period at a fixed rate
business or businesses
- Structured products – these may combine
- Direct investment in other businesses – equities and fixed income and are
investments in businesses managed or structured to achieve a particular goal, for
owned primarily by others, for example, example, guaranteed capital
start-ups, private holdings, initial public
offerings (IPOs) - Investment property/real estate – property
that is not an individual’s primary home
- Cash deposits and savings accounts –
cash held in banks - Private equity – capital, either invested
directly or in funds, that is not noted on a
- Equities – stocks and shares traded on public exchange. It is often used to invest
stock markets directly in private companies or in buyouts
- Investment funds – capital owned by of public companies
numerous investors pooled to purchase - Precious metals – those considered rare
stocks, shares and other investments. This and/or that have a high economic value,
includes mutual funds, managed funds, for example, gold and silver
collective investments, unit trusts, tracker
funds and exchange-traded funds, - Tangible assets and collectibles – items of
among others high value owing to their rarity and/or
popularity. Common categories include
- Alternative investment funds – capital antiques, cars, art, toys, coins, comic books
owned by numerous investors pooled to and stamps
purchase investments in private equity,
hedge funds, managed futures, real estate,
commodities and derivatives contracts (not
conventional investments such as stocks,
bonds and cash)
Shake Up Those Assets | IIFL Wealth Index 2018 02

Also, it is worth noting that India has 108 to his position on the Iran nuclear deal. Some
publicly listed family-owned businesses, the of those threats have dissipated. For example,
third highest number in the world, according relations between the US and North Korea
to a Credit Suisse report in October 2017. The have eased. But other threats have come to
businesses have a high market capitalisation pass, such as the US decision to unilaterally
and, in the world rankings for this, India ranks pull out of the Iran nuclear deal in May 2018,
fifth in Asia (when Japan is excluded) and which led to the threat of war between Iran
22nd in the world. The global average market and Israel and a spike in oil prices. So despite
cap for family businesses is USD6.5bn, some earnings worries, investors seem hooked
according to The CS Family 1000 report from on Indian stocks amid uncertainty elsewhere.
the Credit Suisse Research Institute. The report
found these businesses to be a better In terms of wealth allocation, among those
investment bet than their non-family-owned HNWIs surveyed for IIFL Wealth Management
rivals, delivering better performances. Wealth Index 2018, 16% of wealth is held in
equities and 13% in fixed income. Cash
What is the average value of these primary deposits account for just 6%.
businesses? The IIFL Wealth Management
Wealth Index 2018 found it to be just over In India, precious metals, particularly gold, are
INR165 crore, of which the owner holds, on always a popular choice in times of increased
average, a 50% stake. These primary economic risk. This tends to be more common
businesses, where a large chunk of wealth is among the poorer classes, for whom gold
tied up, tend to be in manufacturing and represents their only security. Among our
industry, followed by the newer business and wealthy survey base, however, precious
financial services sectors. metals and tangible assets make up just 2% of
their portfolios.
Beyond primary businesses and investment
funds, our wealth holders invest in equities, Until recently, property has been the
cash deposits and fixed income. India’s main investment of choice, with half of the wealthy
Mumbai-listed SENSEX stock market index hit putting their money in real estate. Investment
an historic high of 36,360 in January 2018 properties represent 10% of their asset base.
and has since tailed off a little. On 11 May However, this might be excessive and need
2018, it closed at 35,328. rebalancing.
The Nifty-50 diversified stock index has also The World Investment Report 2017 from the UN
done well over the past year, rising from Conference for Trade and Development
9,400.90 on 12 May 2017 to reach a high of ranked India fourth for FDI flows in Asia. Back
11,049.65 on 30 January 2018, before falling in 2016, Indian real estate specifically
back to 10,743.15 by 11 May 2018. Towards attracted USD32bn in private equity and the
the end of last year, some analysts said global capital flow into Indian property that
company earnings would be sluggish due to a year was USD5.7bn. And yet this might have
slowdown in India’s GDP. But expectations of created a bubble in prices that will be difficult
slowing growth were overdone. In fact, in to sustain.
February 2018 it was reported that Indian But the World Investment Report 2017 also states
GDP in the three months to December 2017 that more Indian companies are making or
rose to 7.2%, up from 6.5% the preceding announcing investments in other BRICS
quarter. India’s GDP growth had also countries. So has the time come to rebalance
overtaken China’s in the final three months of their portfolios and shake up those assets?
2017 to make it the fastest growing economy
in the world. Part of the reason for the uplift in
GDP was a rebound in construction.
Analysts also cite the TINA factor – ‘there is no

alternative’. Indian equities have been seen as
a good bet at a time of global instability,
exacerbated by President Trump’s aggressive
foreign policy stance on numerous issues
ranging from greater economic protectionism
03
PROPERTY OUT,
START-UPS IN
Property is seen as the most over-invested Already, 19% of participants are invested in
asset at present and as the wealthy look other businesses and one third believes they
around to make their money work harder, their have not invested enough in this asset
attention is being drawn to the up-and-coming category. This could signal a step forward for
entrepreneurs powering India’s economic India’s up-and-coming business people. They
regeneration. may find it increasingly easy to attract seed
capital from India’s existing fortune builders,
Twenty-eight percent of India’s richest who are looking for ways to get involved in
individuals see property as over-represented in start-ups and be the capital instigators behind
their portfolios. Until now they have viewed India’s economic growth.
property as beneficial on two fronts:
diversification and solid returns. But as these Publicly traded companies offer a route to
wealthy investors seek better returns, equities support middle-level companies’ future growth
and direct investment in businesses other than potential through IPOs, for example.
their own appear to offer better opportunities.
Over- or under-invested?
Percentage of wealthy Over-invested Under-invested
Real estate 28% 9%

Cash deposits and savings 16% 3%
Private equity 13% 10%
Holdings in primary business(es) 12% 12%
Fixed-income investments 12% 10%
Equities 11% 27%
Investment in other businesses 9% 31%
Investment funds 7% 19%
Precious metals 6% 24%
Structured products 5% 17%
Tangible assets 5% 15%
Alternative investment funds 3% 26%

For those seeking to offset this risk and widen Why exactly is India’s rich list turning cool on
the range of assets they hold, precious metals property? The reasons appear to be the desire
is another option, offering stability in an to cash in after a good run of performance,
uncertain economic climate. Indeed, one changing market conditions and a need for
quarter of those surveyed believed they were increased liquidity. Indeed, the last point is
under-invested in this category. demonstrated by the fact that cash deposits
increased among 30% of the wealthiest in the
Whether they choose investment funds,
past five years. In addition, real estate has
start-ups, the future blue-chips of the Indian
been affected by demonetisation, the
economy or precious metals, India’s wealthy elite
establishment of the Real Estate Regulatory
are poised to juggle their investment priorities to
Authority in each state, low rental yields and
reduce their focus on property and turn to
the high cost of owning property.
different assets offering more dynamic returns.
The last major finding on how India’s wealthy
Switching assets seems to be a theme among
plan to rejig their investment portfolio priorities is
wealthy Indians. An astonishing 48% of those
that one third intends to invest more overseas.
already in investment funds plan to raise their
They are already heavily exposed to the
allocation. Of those invested in equities, 46%
domestic economy through their own businesses
similarly plan to increase their stakes while 45%
and other ventures, so it seems increasingly
want to do so in alternative investment funds.
urgent not be dependent on India or one sector
For these assets, this represents an investment alone for growth. To safeguard their fortunes,
continuum. In the past five years, many therefore, the rich are seeking to protect some of
wealthy individuals have been raising their their wealth by investing it overseas.
stakes in alternative investment funds (76%),
The largest number of participants (9%) hold
traditional investment funds (67%) and equities
assets in the US, followed by 5% investing in
(57%). In sharp contrast, over the same time
Southeast Asia and 4% in the Middle East. The
period, 38% of investors upped their exposure
uncertain outlook for the Middle East and the
to property and just 11% plan to do so again in
unsettled state of the EU at present means
the coming year. But most marked of all, 26%
that the US and Southeast Asia are likely to
of investors say they will cut their real estate
remain the most popular investment
asset allocation – the most dramatic of all
destinations.
investment decisions.
INTENTIONS FOR WEALTH ALLOCATION IN NEXT 12 MONTHS
Percentage of wealthy Increase Stay the same Decrease
Investment funds 48% 45% 7%
Equities 46% 43% 11%
Alternative investment funds 45% 47% 9%
Structured products 36% 57% 7%
Other businesses 29% 55% 16%
Fixed-income investments 27% 53% 19%
Private equity 21% 69% 10%
Precious metals 19% 73% 7%
Primary business 17% 74% 9%
Tangible assets 16% 77% 6%
Cash deposits and savings 12% 66% 22%
Real estate 11% 63% 26%
05
RISK AND
(SOCIAL)
REWARD
“Be fearful when others are greedy. Be doing nothing, which makes for a more active
greedy when others are fearful.” - Warren investment strategy.
Buffett on making money and managing risk.
Those invested in equities are willing to take
Entrepreneurialism is powering the brave new greater risks than those in any other
world of the Indian economy and the investment class. But they are seeking
country’s wealthiest people are now willing to mid- to long-term gains with equities being
take risks to achieve substantial returns. While held for an average of four years.
one in three is attempting to hedge the risks in
their investment portfolios, UHNWIs are willing The over 55s seek stability rather than
to up the ante to net those big returns. They investment pyrotechnics. The cautious investor
seem to be showing a desire to move away is guided by previous years’ market volatility
from a heavy reliance on the success of their and, as some wealthy people get older, their
primary business alone. Clearly, this adheres to appetite for risk diminishes.
the investment mantra that there is risk in
AGREEMENT WITH STATEMENTS ABOUT RISK
100% Happy to take risks for the potential of large returns

90% Actively try to hedge the risk in their portfolios
80%
70% 64%
60%
50%
40%
34%
30%
20%
10%
0%

For those willing to still seize the opportunities Livemint newswire reported that the
out there, there is a growing trend towards conference examined 424 deals in India,
so-called impact investing. This is essentially worth USD4.1bn in investment between 2010
investment in companies, organisations and and 2015. These ranged from Sequoia
funds that aim to deliver a positive, Capital’s investment in Cuemath, a company
quantifiable social or environmental impact as offering maths tuition to low and mid-income
well as a financial return. This category of students, to FlipKart, an e-commerce company.
investment is important to 58% of India’s Popular areas for impact investment are
wealthy. It can increase their fortunes while financial inclusion measures (such as
delivering some kind of wider social legacy to micro-finance initiatives), clean-tech,
their country – a matter of some importance to education, healthcare and agriculture. This
the wealthy and to philanthropists generally. study found that not only did such deals
promote public good, they also made financial
A sizeable 61% of entrepreneurs and business sense, with the average median returns in US
owners say impact investment is important to dollars coming in at 10-12% (according to 50
them and 64% consider some form of sample exit deals).
traditional philanthropy to be a priority.
UHNWIs see philanthropy as much more More traditional philanthropy has always been
important but impact investing is on the rise, an ingrained part of Indian culture and that
with India expected to see such investments charitable instinct can be seen at work across
increase to a sizeable USD40bn by 2025. all sections of society. The Wealth-X database
Imagine how seed investment on this scale provides details of some of the most generous
could unleash the full potential of Indian donors. Among them are Wipro chairman Azim
start-ups making verifiable social impacts. Premji, who has set up his eponymous
foundation with approximately USD8bn.
This kind of social business enterprise is more Bengaluru-based Infosys billionaires Nandan
important to women than men. And yet and Rohini Nilekani are also active
traditional philanthropy remains in robust philanthropists, who support educational,
health among the elite. According to the environmental and social benefit causes,
Wealth-X database, education is the top including the National Council of Applied
philanthropic cause among India’s UHNWIs, Economic Research, the Indian Institute of
followed by public benefit and health. Human Settlements and conservation charity
Of all philanthropic donations in India, 37% ATREE. One sale of Infosys shares provided
are made to education, 15% to public/society USD27m to support various charities in the
causes and 10% to health. The average fields of water, education and the
amount given by donors in India is environment. Industrialist and Infosys
INR78 crore. co-founder NR Narayana Murthy has made
many donations. For example, he donated
One major theme to emerge from the 2014 USD1.6m (worth INR10 crore today) to create
election campaign was the chasm between 100 Nirmala Bangalore sanitation systems with
the wealthiest and those at the bottom of the Bangalore Agenda Task Force.
Indian society. Inequality of opportunity and
wealth has become a global political issue Coutts noted in its 2015 report on Indian
and, like many other countries, India is looking philanthropy that the Rigveda, Hinduism’s
to address it. Part of Prime Minister Narendra ancient scripture, devotes an entire chapter to
Modi’s electoral mandate was to deliver daan or alms-giving and charity. Philanthropy
change to enable all Indians to share in their is rooted deep within the Indian psyche and
country’s growth. charitable giving is part of the spiritual tradition
of India’s many other faiths, including Sikhism,
Impact investment and philanthropy to help Christianity, Buddhism and Islam. The Coutts
those less fortunate are, therefore, set to report cited examples of how philanthropy has
become increasingly important as part of the helped to transform lives across the country.
wider political discourse. In 2016, India hosted
its first impact investment conference in New For instance, Dr Yusuf Hamied, a top scientist
Delhi. Organised by the Impact Investors and chairman of pharmaceuticals company
Council, the event was attended by 175 limited Cipla, has devoted his charitable giving to
partners and fund managers. education and healthcare. Meanwhile,
07
broadcasting entrepreneurs Ronnie and Zarina choosing investments and growing their
Screwvala founded the Swades Foundation, fortunes. The next stage is to take an active
which aims to empower one million rural part in their country’s transformation and
Indians and lift them out of poverty through economic renaissance. Members of India's
specialist training and grants. wealthy elite are achieving this by using their
fortunes and knowledge to empower and
Such initiatives show that there is a virtuous galvanise those at the bottom of society,
circle at work for many of India’s most helping to ensure they are not left behind as
powerful fortune builders. They see the first India races into the future.
stage of their work as making money,
THE IMPORTANCE OF GIVING BACK
Impact investing Philanthropy and charitable giving

100%
90% 84%
80% 74%
70% 65% 65% 67%
60% 58% 59% 58%
50%
40%
30%
20%
10%
0%
HNW VHNW UHNW Overall

A MATURE APPROACH
TO FAMILY WEALTH
JASON BUTLER
Financial Times columnist
Over my 25-year career as a financial advisor, (or at least a lot more than their parents) from
I specialised in working with entrepreneurs their own hard work.
and senior executives, interviewing more than
500 wealthy people. One of the most The first is that as they accumulate wealth,
enjoyable parts of my job was hearing beyond a certain point it doesn’t increase their
incredible client life stories. life satisfaction and happiness. Having a strong
life purpose and sense of meaning are, in my
Anil started a manufacturing company shortly view, key to a flourishing and fulfilling life.
after being made redundant as a sales executive
at the age of 54 and went on to build it to Markus Persson, the founder of Mojang, the
become a major player in its field. computer-game company behind Minecraft,
became very unhappy after he sold his
Fabio, who had a very challenging childhood and business to Microsoft in 2014 for more than
limited education, created and grew a technology GBP2bn. Although having a few billions in the
company from scratch and went on to sell it for bank is clearly a nice problem to have, Persson
many millions 10 years later. became disillusioned with partying and
spending money on possessions, when what
Husband and wife Nigel and Lien decided to he really wanted to do was work with smart
give up their corporate careers and downsize people and create great computer games.
their lifestyle to start an ecommerce business,
which went on to become a leader in its market. I know from personal experience, after the
sale of my own business, that when money
A common theme among these and many of ceases to be a necessity, the desire to make a
the people I had the privilege to meet was difference and create tangible value can be a
their desire and determination to build their very powerful way of staying motivated and
own business. happy. And the more financially successful
While most were initially motivated by you become, the more you can afford to take
economic necessity, and they were keen to higher risks that potentially have big payoffs,
build tangible personal wealth, for many the both financially and emotionally.
act of building a business was motivating in The second potential challenge for financially
and of itself. successful people is that their children, and
But there are two potential consequences that possibly grandchildren, grow up with greater
arise for people who build significant wealth
09
advantages and a more comfortable lifestyle liquid investment portfolio diversified across
than they did. This can have serious world stock markets and asset classes, where
implications for wealth succession, particularly capital and returns are retained for the family’s
in the case of a family business. use. Heirs get used to how capital markets
work, including the importance of discipline
Some young adults from financially successful and controlling emotions in the face of
families can develop an entitlement mentality, and uncertainty, thereby improving their chances
lack motivation to make their own way in the of preserving wealth for themselves and
world. Or they might feel that the family’s wealth is future generations.
a poisoned chalice and something to rebel against.
Others are happy to coast along and do just The return OF capital holdings are social
enough to get by, safe in the knowledge that they impact investments that are technically
can fall back on family money if things go wrong. available to the family but, until needed,
generate positive social outcomes not met by
Helping younger family members to find their conventional investments. Where possible,
own life purpose, within or beyond the such investments can be recycled into new
business, and sense of self-worth in the social impact holdings as they are realised,
shadow of their parents’ or grandparents’ thereby providing opportunities for heirs to get
financial success isn’t easy but it is absolutely involved in the selection process and thinking
essential and entirely possible to achieve. beyond their own needs.
I always counselled my clients to do three The tax return for philanthropic capital
things: Diversify their wealth so they couldn’t recognises that, once gifted to a charitable
make a killing or be killed by any one type of cause, the capital is removed from the family
investment; help their heirs to learn how to be balance sheet. Heirs can be involved in the
responsible with family wealth; and use their selection and monitoring of charitable giving
excess wealth to make a difference to wider to ensure the capital is used in a way that is
society. aligned with the family’s values. This also helps
By viewing family wealth in a holistic way, and to reinforce the value of money and show
involving your heirs in its oversight, allocation heirs that their personal consumption is not
and use, you can develop a dialogue about the only financial objective.
your money values, and greatly increase the Building wealth comes with many obligations
chances of money being a force for good in but also presents many opportunities. India’s
the family. It also has the added benefit of emerging affluent and wealthy families need
enabling heirs to also learn how to work with to take a mature approach to preserve the
the family’s professional advisors, which is an wealth that they create while also helping
essential but often overlooked aspect of younger generations learn the values, mindset,
wealth succession. understanding and skills to ensure that money
In addition to family wealth represented by is a force for good for both themselves and
used, property and business assets, the bulk of wider society.
liquid family capital can be allocated to
achieve three different objectives: a return ON
capital; a return OF capital or a tax return plus Jason Butler is a Financial Times personal
a return TO SOCIETY as represented below. finance columnist and author of Money
The return ON capital usually represents a fully Moments: Simple Steps to Financial Wellbeing.
THE MONEY-FOR-PURPOSE SPECTRUM

Investment Impact Philanthropy
Normal
funds
Best-in-class funds
Negative screen funds

Financial Values
first Positive screen funds first
Thematic funds
Risk-based Sustainability Social Micro- Donor-advised Charitable

funds funds enterprise finance fund giving
RETURN ‘ON’ RETURN ‘OF’ ‘TAX’

CAPITAL CAPITAL RETURN

A WORLD OF SPICE,
MONEY AND GOD
SURENDRA KUMAR GUPTA AND

SOM PRAKASH GOENKA
Founders and Directors, Goldiee Masale
11
The name Goldiee Masale is synonymous with expansion. His future wealth priorities vary
spices and condiments in kitchens across from conservation to growth and expenditure.
India and it is becoming a global brand as its Goenka says: “My priority going forward is to
exports are on the rise. It all began quite expand our business and to invest in our
humbly as the brainchild of partners Som brand and take it to greater heights. We are
Prakash Goenka and Surendra Kumar Gupta in engaged in this at this moment.”
1980 out of a small manufacturing unit in
Kanpur, Uttar Pradesh in Northern India and Goenka believes that the Goldiee group
today it is one of India’s premier food legacy will be continued by his own children.
manufacturing groups. They continued their higher education in the
US and UK to learn the best international
Goldiee started out selling packaged spices practice and be able to apply it to the
such as cumin, turmeric and coriander, which businesss at home.
form the heart of Indian cooking. Its founders’
business mantra from the beginning was to Goenka says: “We will not make anything that
combine quality with cutting-edge technology. is harmful to the human body. We believe in
Today the company has hundreds of products, highest quality and lowest price – this has
including spices, pickles, tea, noodles and been the backbone of our growth. Our
syrups, just to name a few. It has more than children are also following our footsteps
1,500 distributors and 60,000 retail outlets. and strongly believe this.”
Goenka says he is extremely confident about When it comes to creating a long-lasting
the economic outlook, adding that further legacy, Goenka, like many of his countrymen,
growth is on the cards for Goldiee. is aware of the need to take care of the less
“By next year we have plans to expand our fortunate in a country where hundreds of
business by about 10 times to meet demand millions of people live on less than a dollar a
within the country and internationally. There day.
are so many products for which sky is the Philanthropy is a part of everyday life. He says:
limit,” he says. “We have a saying in our house – charity is in
Goenka believes that the economic climate our blood. We believe in God and the good
engendered by the Indian government has path to God is through charity.”
given Indian entrepreneurs an unprecedented For that reason, both Goenka and Gupta are
opportunity to make their mark. The IIFL always interested in looking at ways to give
Wealth Index 2018 found that a large back to society and provide means to help
proportion of India’s wealthy elite were India’s most vulnerable.
self-made. Goenka is extremely proud of the
success of Indian entrepreneurs: “We are very interested in this matter,” Goenka
explains. “Our motto of life is not to have
“We are proud; early on, there were so many money only for yourself but to put it to good
challenges. But because of the good policies use. We have a duty to help others – not only
of the Indian government we don’t see many our staff, but the underprivileged as well. This
difficulties ahead.” is the way it should be.”
Goenka believes that now his company's
brand is well established, Goldiee is better able
to adjust to the risks associated with overseas

METHODOLOGY
The survey, conducted HNWIs

in early 2017, involved Individuals with a net worth between
INR65m and INR650m.
500 wealthy
VHNWIs
participants from across Individuals with a net worth between
India. It is the largest INR650m and INR2bn.
of its kind and the UHNWIs

most comprehensive Individuals with a net worth of INR2bn
and above.
survey of the wealthy
in India. A mixture of
face-to-face and
online interviews were
used. The participants
were analysed into
three key groups,
based on net worth:
13
WEALTH-X MODEL individuals across the globe, as well as further
dossiers on individuals lower down the wealth
AND PROFILING pyramid, allows us to construct wealth
distribution patterns using real – rather than
To size and forecast the ultra wealthy population implied – wealth distributions. This makes the
and its combined wealth, we use our newly model more reliable. We then use the resulting
updated proprietary Wealth and Investable Assets Lorenz curves to distribute the net wealth in a
Model. This model produces statistically country across its population. The database is
significant estimates for total private wealth and also employed to construct investable asset
estimates the size of the population by level of distribution patterns across each country’s
wealth and investable assets for the world and population. The model uses residency as the
each of the top 70 economies, which account for determinant of an individual’s location.
97% of To profile the ultra wealthy in greater depth,
world GDP. this report also leverages the unique and
We use a two-step process. First, to estimate total proprietary Wealth-X Ultra High Net Worth
private wealth, we employ econometric Database, the world’s most extensive
techniques that incorporate a large number of collection of curated research and intelligence
national variables, such as stock-market values, on ultra wealthy individuals. Our database
GDP, tax rates, income levels and savings from provides insights into their financial profile,
sources such as the World Bank, International career history, known associates, affiliations,
Monetary Fund, Organisation for Economic family background, education, philanthropic
Cooperation and Development and national endeavours, passions, hobbies, interests and
statistics authorities. Second, we estimate wealth much more. Our proprietary valuation model
distribution across each country’s population. (as defined by net worth) assesses all asset
holdings, including privately and publicly held
A lack of wealth distribution data means most businesses and investable assets. The
wealth models estimate wealth distribution database takes the primary business address
patterns using income distribution data. However, as the determinant of an ultra wealthy
Wealth-X’s proprietary database of more than individual’s location.
100,000 dossiers on ultra wealthy
Shake Up Those Assets | IIFL Wealth Index 2018

14
ABOUT WEALTH-X
Wealth-X is the leading global wealth
information and insight business, partnering
with prestige brands across the financial
services, luxury, not-for-profit, and higher
education industries. We have developed the
largest collection of hand-curated dossiers on
ultra high net worth individuals available
anywhere in the world today, as well as the
world’s foremost high net worth market research
team. At Wealth-X, we believe in the power of
applied wealth intelligence to drive success for
our clients. Our proprietary data assets and
specialised research capabilities help our clients
understand and engage their target audience,
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decisions. To learn more, please visit
www.wealthx.com
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IIFL Wealth Management Limited is one of the holds a stake of around 22 per cent in the
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India in less than a decade. Today, it is the Management Survey 2017 and has picked
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♦IIFL

IIFL WEALTH INDEX 2018

India’s rich list 01

India’s rich outpace global peers 04

How did they make their wealth? 05

A portrait of India’s wealthiest 09

Building health, reforming wealth 13

Riding to new opportunities 15

WEALTHY POPULATION GROWTH (HNW+) CAGR 13.3%

CAGR = compound annual growth rate, F = forecast Source: Wealth-X

WEALTH HELD BY INDIA’S WEALTHY (HNW+, INRtrn) CAGR 14.7%

0 20 40 60 80 100 120 140 160 180 200

CAGR = compound annual growth rate, F = forecast Source: Wealth-X

India’s Quantum Leap | IIFL Wealth Index 2018 02

INDIA’S WEALTHY (NUMBER) VHNW 12,460

WEALTH (INRtrn) VHNW 13.4

HNW 41.5 Source: Wealth-X

% GROWTH OF WEALTH NUMBER OF NEW WEALTHY

Rank Country Rank Country

1 Philippines 1 United States

India’s Quantum Leap | IIFL Wealth Index 2018 04

Savings through earnings/

Profit from property 15%

Business owner/ 87%

UHNW VHNW HNW Source: Wealth-X

India’s Quantum Leap | IIFL Wealth Index 2018 06

overwhelming population can bolster its coffers in future

business owners or are still working.

Breaking down the wealthy by gender, it is

wealth remaining tied

91% Under INR325m

Working Not working

18-34 35-54 55-64 65+

5% 43% 25% 27%

India’s Quantum Leap | IIFL Wealth Index 2018 08

COMPARING INDIAN UHNWIs TO AVERAGE INDIAN AVERAGE GLOBAL

COMPARING UHNWIs TO AVERAGE INDIAN AVERAGE HNW

Their geographic spread is dominated by two greater availability of capital as India's

India’s Quantum Leap | IIFL Wealth Index 2018 10

TOP UNIVERSITIES ATTENDED BY THE WEALTHY

University of Mumbai 26%

Indian Institute of Management 10%

Savitribai Phule Pune University 4%

Institute of Chartered Accountants of India 4%

Indian Institute of Technology, Kanpur 3%

LOCATION OF SECOND HOME/INVESTMENT PROPERTY

Asia excluding India 5%

India’s Quantum Leap | IIFL Wealth Index 2018 12

India’s Quantum Leap | IIFL Wealth Index 2018 14

India’s Quantum Leap | IIFL Wealth Index 2018 16

IIFL WEALTH INDEX 2018

What keeps the wealthy awake at night 01

Investment planning: Asset rich, time poor 05

Reputation, reputation, reputation 07

Originators and inheritors: the different 09

Engineering a success story 11

Threat of jihadi terrorism 77%

Societal issues in India 73%

India’s relationship with 70%

Currency volatility 62%

Donald Trump as President

Breakup of the 50%

To generate an income 44%