Karvy Private Wealth, which came out with its fifth edition of India wealth report on Tuesday, says direct equity will become the single largest asset class overtaking fixed deposits in FY15. The report also states that total individual wealth in India for FY14 is estimated to be at R257.41 lakh crore, an increase of 27.47% over FY13.
The report also said total individual wealth is expected to reach R514 lakh crore in FY19 from R257.41 lakh crore in FY14 showing a compounded annual growth rate (CAGR) of 14.86%. Sunil Mishra, CEO of Karvy Private Wealth said, “Due to macroeconomic revival, we are seeing possibly the beginning of the biggest bull run in India. We believe that wealth held by individuals in financial assets is expected to double in the next four years at 18.25% CAGR while wealth in physical assets is expected to grow at 10.03% CAGR in next five years.”
Out of R257.41 lakh crore of individual wealth in India in FY14, R134.71 lakh crore is in financial assets while remaining R122.70 lakh crore is in physical assets which includes real estate, gold diamond, silver and platinum. In financial assets, largest proportion is of fixed deposits and bonds (21.82%), direct equity (19.79) and insurance (16.43%), stated the report.
On the other hand, mutual funds still constitute a minor proportion of under 3% in financial assets which stands at R3.93 lakh crore in FY14. According to Mishra, mutual funds is expected to grow at 25.44 % for next five years and can reach R12.20 lakh crore mark by FY 19. “With surge in equity markets and maturity levels of investor increasing we expect mutual funds to grow at rapid pace,” concluded Mishra.