A Kotak Private Banking’s TOP report says Indian Ultra-HNIs are expanding their equity investments:
Equity is the preferred asset class for Ultra-HNIs in India and they have allocated 32% of their investment to this asset class with 89% favoring individual stocks, finds latest ‘Top of the Pyramid (TOP) Report by Kotak Private Banking.
The report, marking the 20th anniversary of Kotak Private Banking, which offers holistic financial solution to India’s Ultra HNIs, says global equities, particularly in the U.S., are gaining traction among the Ultra HNIs in the country. It says 62% of Ultra-HNIs prefer aggressive equity investments, with a third having global investments, mainly in the U.S. and UK. Residential real estate, direct equities, and mutual funds are popular global assets for this class.
WHY GLOBAL INVESTMENTS
The report says the Ultra-HNIs are now looking beyond national borders for astute and practical investment opportunities. “The motivations that drive them to invest globally range from favourable business environments to taxation to portfolio diversification. As Ultra-HNI wealth grows and they spend in dollars, it becomes essential to invest in dollars too. While global investment strategies reflect the immediate financial goals of Ultra-HNIs, their long-term vision extends to preserving wealth and transferring it to future generations. For Ultra-HNIs, the approach to succession typically encompasses moulding the next generation, nurturing their development, and inspiring them to adopt a broader, long-term perspective,” says the report.
The report says strong economic activity in the country has fuelled an IPO boom among Ultra-HNIs in the country. “India led globally with 268 IPOs in 2024, boosting investor confidence and increasing its global IPO market share to 30%, while M&A and PE/VC activities declined. Investors shifted focus to sustainable business plans with clear exit strategies,” it said.
It pointed out that in late 2023 and 2024, strong economic activity and positive investor sentiment led to a surge in fundraising, with 14% of Ultra-HNIs citing the sale of their primary business as their wealth source.
HEALTH, WELLNESS
Another shift in the investment patterns of the Ultra-HNIs, according to the report is that health & wellness spending is taking center-stage with Ultra-HNIs prioritizing comprehensive well-being and over 90% considering it essential spending. “They allocate 10% of their budget to health and wellness, with 81% increasing their spending on preventive healthcare and lifestyle modifications. Wellness travel, both domestic and international, has surged, with destinations like Uttarakhand and Kerala being popular,” says the report.
The ultra-HNIs are also found to be investing in home fitness solutions and sustainable diets and foreign travel for leisure is also significant, with 7% of expenses dedicated to it, and luxury, exclusive experiences are in high demand, according to the report.
INTEREST IN IPO
The report says strong economic activity in the country has fuelled IPO boom among Ultra-HNIs in the country. “India led globally with 268 IPOs in 2024, boosting investor confidence and increasing its global IPO market share to 30%, while M&A and PE/VC activities declined. Investors shifted focus to sustainable business plans with clear exit strategies,” it said.
Among other asset classes, commercial real estate is a top asset choice for 45% of Ultra-HNIs as this is found to be offering higher yields and better leasing terms, compared to 33% for residential real estate.
MIGRATION PLAN
Another noteworthy finding in the report is that 1 in 5 Ultra-HNIs surveyed are currently in the process of or plan to migrate, through most of them intending to reside in their chosen host country permanently while retaining their Indian citizenship. Professionals, the report said, show a higher propensity to migrate than entrepreneurs or inheritors. Among those considering global migration, 69% cited smoothening of business operations as the key driver.
For the Ultra-HNIs, says the report, collectibles are a significant interest – blending personal interest, cultural appreciation, and strategic investment. “Collectibles include jewellery, fine art, vintage wines, classic automobiles, rare coins, stamps, luxury bags, and NFTs (or Non-Fungible Tokens, which are digital assets that represents unique items like art, collectibles, or even virtual real estate). Notably, 94% of Ultra-HNIs own jewellery, 73% own art, and NFTs are gaining favour over cryptocurrencies, with 24% planning further digital asset purchases,” says the report.
The report also touched on succession planning among the Ultra-HNIs and said 37% of Ultra-HNIs prioritize secure wealth transfer, with 43% relying on private bankers or accountants for planning. Two-thirds view estate and succession planning as essential, though 30% have yet to plan.
According to Oisharya Das, CEO, Kotak Private Banking, as India’s economic landscape evolves, Ultra-HNIs are diversifying their portfolios and embracing both domestic and global assets, setting the stage for a significant rise in their spending by 2028.
Kotak Private Banking estimates that there were 283,000 Ultra-HNIs in India in 2023 with an estimated total wealth of Rs232 trillion. “We project that in the year 2028, there will be 430,000 Ultra-HNIs with an estimated total wealth of Rs359 trillion,” it says.