As for the underlying wealth held by this uber rich grouping, which also includes professionals having an annual income of over Rs 3 crore, grew 21 per cent to Rs 104 trillion (Rs 104 lakh crore), and will grow four times to Rs 408 trillion in the next three years, says a wealth report by the Kotak group and Ernst & Young.
"There has been an impressive rise in wealth creation and will only increase in the years ahead. Growth in the underlying wealth will outpace growth in the number of UHNIs," consultancy firm E&Y partner Murali Balaraman told reporters here.
His colleague Abizer Diwanji said from the societal point of view, managing this growth in the number of the rich people will not cause any tensions as economic disparity is an "accepted norm" in the country.
Balaraman said the firm, which partnered with the Kotak Wealth Management to launch the report, extrapolated available economic data to arrive at the current number of UHNIs, their wealth, as also the estimates going forward.
Even though the rising criticism of the country going the crony capitalist way and questions over wealth creation by the few dominating public discourse, Balaraman said the report did not devote any attention to how the wealth was created.
Of the UHNIs, 150 individuals and another 15-20 companies closely associated with the segment like those selling luxury brands and wealth managers, were interviewed to analyse how the wealth gets allocated to different uses like leisure, travel, investments and philanthropy.
The interviews, done in March before the outcome of the general elections, pointed out to much optimism on the economic environment among the UHNIs.
Diwanji said because of this, there has been an increase in spending to the tune of 44 per cent in FY'14 from the 30 per cent in FY12.
He said even though investing in real estate continues to be a favourite avenue, allocations to equity are also growing and grew to 38 per cent in FY14, up from 35 per cent the previous year.
Kotak Mahindra Bank joint managing director C Jayaram said the propensity towards equities will only grow now on given the changes in the tax laws governing fixed income investments, which was a favourite earlier, in the budget.
There has also been a surge in gold investments during the year, Balaraman said.
On the philanthropic front, 60 per cent of those surveyed said they would pay to charities while planning their annual expenditure.
Balaraman said of the UHNIs, the professionals are hands-on with their contributions and generally come up with help beyond the donations to ensure the success of the aim, while those who have inherited the wealth stop only at making the contribution.
In investments, there has been the emergence of a new asset class as UHNIs have started investing in private equity funds very sizeable.
Over 26 per cent of the surveyed UHNIs said they have private equity investments, with real estate and IT being the key focus sectors, while e-commerce and pharma catching up.