INDIA WEALTH REPORT

2014Reforming to Perform

Is your wealth favourably aligned to the overall Indian & Global Trends?

FDI

Volume 5 FOR PRIVATE CIRCULATION ONLY December 2014

Foreword

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Contents

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List of Tables

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1Executive Summary

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2Global Individual Wealth*OREDO3ULYDWH)LQDQFLDO:HDOWKVWRRGDW86WULOOLRQPDUNLQJDJURZWKE\DVFRPSDUHGto 20121,QDEVROXWHWHUPV1RUWK$PHULFDVWRRGDW86WULOOLRQIROORZHGE\:HVWHUQ(XURSHDW86WULOOLRQDQGUHPDLQHGWKHZHDOWKLHVWUHJLRQVLQWKHZRUOG$VLD3DFLFUHJLRQH[FOXGLQJ-DSDQVWRRGFORVHO\WR:HVWHUQ(XURSHDW86WULOOLRQ27KH$VLD3DFLFUHJLRQUHSUHVHQWHGWKHIDVWHVWJURZLQJUHJLRQZRUOGZLGHZLWKWKH+1,SRSXODWLRQLQFUHDVLQJE\DQGWKHZHDOWKLQFUHDVLQJE\FRQWLQXLQJWKHWUHQGRIKLJKJURZWKLQWKHQHZZRUOG7KHJOREDOSRSXODWLRQRI+1,V3H[SDQGHGE\WRPLOOLRQZHOODERYHPLOOLRQRIZKLOH+1,ZHDOWKLQFUHDVHGE\WR86WULOOLRQ

Individual Wealth in India7KHDPRXQWRI ,QGLYLGXDO:HDOWK LQ ,QGLD LVFDOFXODWHGE\DJJUHJDWLQJ WKHSULYDWHZHDOWK LQDOODVVHWFODVVHVLQZKLFKLQYHVWPHQWVDUHPDGHE\LQGLYLGXDOV,WGRHVQRWFRQVLGHUJRYHUQPHQWDQGLQVWLWXWLRQDOKROGLQJV,QWKLVUHSRUW)LQDQFLDODVVHWVDQG3K\VLFDODVVHWVZKHUHLQYHVWPHQWVDUHPDGHE\LQGLYLGXDOVRI,QGLDDUHFRQVLGHUHG7KHWRWDO,QGLDQ,QGLYLGXDOZHDOWKLQ)LQDQFLDODVVHWVVWDQGVDW`/DNK&URUHLQ)

37DEOH&ODVVLFDWLRQRI,QGLYLGXDO:HDOWKLQ,QGLDEDVHGRQ)LQDQFLDOAssets

Asset Type Amount (` Cr.) Proportion (%))L[HG'HSRVLWVDQG%RQGV 'LUHFW(TXLW\ ,QVXUDQFH 6DYLQJV'HSRVLWV Cash 3URYLGHQW)XQG 15,'HSRVLWV 6PDOO6DYLQJV 0XWXDO)XQGV &XUUHQW'HSRVLWV 3HQVLRQ)XQGV $OWHUQDWLYH$VVHWV ,QWHUQDWLRQDO)LQDQFLDO$VVHWV Total 1,34,71,160 100.00

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Figure 1: Asset-Wise Distribution of Individual Wealth in India (Financial Assets)

Fixed Depositsand Bonds

21.82%

Equity19.79%

Insurance16.43%

Saving Deposits12.09%

Cash9.66%

Provident Fund5.46%

NRI Deposits4.62%

Small Savings4.30%

Mutual Funds2.92%

Current Deposits2.29%

Pension Funds0.36%

Alternative Assets0.18%

International Financial Assets

0.09%

47DEOH&ODVVLFDWLRQRI,QGLYLGXDO:HDOWKLQ,QGLDLQ3K\VLFDO$VVHWVAsset Type Amount (` Cr.) Proportion (%)*ROG Real Estate 'LDPRQG 6LOYHU 3ODWLQXP Total 1,22,70,501 100.00

Figure 2: Assets Wise Distribution of Individual Wealth in India (Physical Assets)

,QGLYLGXDOZHDOWK LQ3K\VLFDO$VVHWVVWDQGVDW`/DNK&URUH7KH LQGLYLGXDOZHDOWK LQJROGVWDQGVDWDZKRSSLQJ`/DNK&URUHVKRZLQJ,QGLDVDIQLW\WR\HOORZPHWDO,QYHVWPHQWLQ5HDO(VWDWHVWDQGVDW`/DNK&URUHH[FOXGLQJSULPDU\UHVLGHQFH*ROGDQG5HDO(VWDWHIRUPDEXONRISK\VLFDOZHDOWKLQ,QGLDLH,QWKLVUHSRUWZHKDYHDOVRDGGHGWKHZHDOWKKHOGE\,QGLYLGXDOVLQ'LDPRQG6LOYHUDQG3ODWLQXP

7DEOH&ODVVLFDWLRQRI,QGLYLGXDO:HDOWKLQ,QGLDLQ.H\$VVHW Classes

.H\$VVHW&ODVVHV Amount (` Cr.) Proportion (%)(TXLW\ 'HEWLQFOXGLQJ&DVK $OWHUQDWLYH$VVHWVLQFOXGLQJ*ROGDQGRWKHUSUHFLRXVPHWDOVDQGJHPVLQSK\VLFDOIRUP

Real Estate Total 2,57,41,661 100.00

Gold 50.96%Real Estate

41.07%

Diamond6.33%

Silver1.59%

Platinum0.05%

5Section 1:

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Figure 3: Global Individual Financial Wealth

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Figure 4: Figure 5:

Number of HNIs Globally Global HNI Wealth Allocation

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Africa1%

Latin America4% Middle East4%

Europe28%

Asia-Pacific31%

North America32%

Africa2% Latin america

4%

Middle East15%

Europe24%

Asia-Pacific27%

North America28%

Figure 6: Forecast of Global HNI Financial Wealth

7DEOH&ODVVLFDWLRQRI:HDOWK*OREDOO\LQ.H\$VVHW&ODVVHV.H\$VVHW&ODVVHV Global (%)(TXLW\ 'HEWLQFOXGLQJ&DVK $OWHUQDWH$VVHWVLQFOXGLQJ*ROGDQGRWKHUSUHFLRXVPHWDOVDQGJHPV

Real Estate Total 100.00

7KH*OREDODVVHWDOORFDWLRQLQHTXLWLHVIHOOWRFRPSDUHGWRODVW\HDU3URSRUWLRQRIDOWHUQDWHDVVHWVJUHZWRDVFRPSDUHGWRLQ

Source: World Wealth Report 2014, Page 9, Figure 6, Capegemini and RBC Wealth Management

Section 2:

Indian Economic Scenario7KH*HQHUDO(OHFWLRQZDV WKHPRVW LQXHQWLDO IDFWRUDIIHFWLQJ WKH ,QGLDQ 6WRFNPDUNHWV LQ 7KHH[SHFWDWLRQV RI D EXVLQHVV IULHQGO\ JRYHUQPHQWFRPLQJ WR SRZHU LQ WKH FHQWUH ERRVWHG LQYHVWRUFRQGHQFHZKLFKUHVXOWHGLQWKH,QGLDQ6WRFN,QGLFHVRXWSHUIRUPLQJLWV$VLDQDQG:HVWHUQFRXQWHUSDUWV10

7KH6HQVH[PLJKWSDLQWD URV\SLFWXUH IRU WKH ,QGLDQHFRQRP\EXWDWD IXQGDPHQWDO OHYHO WKHHFRQRP\LVVWLOOUHFRYHULQJIURPWKHVORZGRZQ7KHWULOOLRQ,QGLDQHFRQRP\VXIIHUHGLWVZRUVWVORZGRZQWLOO)

&3,LQDWLRQZKLFKZDVDELJFRQFHUQIRU5%,LVQDOO\FRPLQJGRZQLQ2FWREHU11 ZKLFKZLOOKHOS5%,LQGHFUHDVLQJLQWHUHVWUDWHVWKXVJLYLQJDPXFKQHHGHGVWLPXOXVWRWKHHFRQRP\$QRWKHUZRUU\LQJIDFWRUIRUWKHHFRQRP\LQWKHSDVW,,3LVDOVRVKRZLQJVLJQVRIUHYLYDO12 LQ0D\LQGLFDWLQJWKDWWKHPDQXIDFWXULQJVHFWRULVRQWKHSDWKRIUHYLYDO,QGLDV&XUUHQW$FFRXQW'HFLW&$'IRUWKHTXDUWHUHQGHG0DUFKWKLV\HDUIHOOVKDUSO\WRRIJURVVGRPHVWLFSURGXFWELOOLRQIURPELOOLRQD\HDUHDUOLHUDVWKHIDOOLQLPSRUWVZDV VWHHSHU WKDQ WKH GURS LQ H[SRUWV +RZHYHU LQ )

10

Section 3:

Individual Wealth in India7KHWRWDO,QGLDQ,QGLYLGXDOZHDOWK LQ)LQDQFLDO$VVHWVVWDQGV DW ` /DNK&URUH DV LQ )

11

Section 4:Asset wise break up of Individual Wealth held in Financial Assets7KH WRWDO ,QGLYLGXDO ZHDOWK KHOG LQ )LQDQFLDO$VVHWVVWDQGV DW ` /DNK &URUH PDUNLQJ D JURZWK RIDVFRPSDUHGWR)

12

Table 7: Composition of Individual Wealth in Bank Fixed Deposits

Bank Category Amount (` Cr.) YOY Change (%)

6FKHGXOH&RPPHUFLDO%DQNV 6FKHGXOH&RRSHUDWLYH%DQNV Total 27,91,256 17.14

Corporate Fixed Deposits:&RUSRUDWH )L[HG 'HSRVLWV DOVR NQRZQ DV &RPSDQ\ )L[HG 'HSRVLWV DUH LQYHVWPHQW RSWLRQVRIIHUHG E\ FRPSDQLHV WKH\ HDUQ D [HG UDWH RI UHWXUQ RYHU D SHULRG RI WLPH7KH UHWXUQV DUHJHQHUDOO\KLJKHUWKDQ%DQN)'VDQGWKXV&RUSRUDWH)'VDUHFRQVLGHUHGDVDOXFUDWLYHLQYHVWPHQWRSWLRQ+RZHYHU WKHVHDUHFRQVLGHUHGDELW ULVN\DVDQ LQYHVWRUFDQQRWHDVLO\ UHFRYHUKLVKHULQYHVWHGDPRXQWLIWKHFRPSDQ\GHIDXOWVThe Individual Wealth in Corporate Fixed Deposits in the FY14 is about `67,676 Crore a GHFOLQHRIDVFRPSDUHGWR)

13

3XEOLF'HSRVLWVZLWK1RQ%DQNLQJ)LQDQFH&RPSDQLHV1%)&VLQFUHDVHGE\LQ)

14

Table 9: Composition of total and Individual Wealth in Bonds and Debentures

6HFWRU Individual Wealth in FY13 (` Cr.)

Individual Wealth in FY14 (` Cr.)

YOY Change (%)

368 &RUSRUDWH Total 67,937 66.41

'LUHFW(TXLW\,QGLDZDVWKHRQO\RQHDPRQJWKH%5,&QDWLRQVWRKDYHDSRVLWLYHFKDQJHLQWKHVWRFNLQGLFHV,WEXFNOHGWKHJOREDOWUHQGRIGHFOLQLQJVWRFN PDUNHWV 7KH VLQJOH ELJJHVW IDFWRU LPSDFWLQJ WKH VWRFNPDUNHWVWKLVVFDOZDVWKH,QGLDQ*HQHUDO(OHFWLRQV1LIW\URVHIURPRQWKHst$SULODQGUDOOLHG WRRQst 0DUFKZKLFKWUDQVODWHGLQWRDPDUNHWFDSLWDOL]DWLRQLQFUHDVHRI`/DNK&URUHIURP`/DNKFURUH7KHEXOOPDUNHWVWDUWHGZLWKWKH1'$DQQRXQFLQJ0U1DUHQGUD0RGLDVWKHLU30FDQGLGDWHRQWKHthRI6HSWHPEHUZKRLVVHHQDVDULJKWZLQJSHUVRQ7KHEXOOUXQKDVFRQWLQXHGDQGWKHPDUNHWFDSLWDOL]DWLRQKDVWRXFKHG/DNK&URUHUHFHQWO\0DQ\1HZ,QLWLDWLYHVOLNH0DNHLQ,QGLD'HYHORSPHQWRI6PDUW&LWLHV2SHQLQJRI)',LQVHYHUDOVHFWRUV)UHHSULFLQJRI$XWR)XHOV6ZDFKK%KDUDW$EKL\DQ KDV EHHQ ODXQFKHG E\ WKH QHZJRYHUQPHQW+HQFHPRUH DQGPRUH GRPHVWLF DQGLQWHUQDWLRQDOLQYHVWRUVDUHJHWWLQJFRQYLQFHGDERXWWKH,QGLDVWRU\/RRNLQJDWWKHFXUUHQWPDFURWUHQGVFRROLQJFRPPRGLW\SULFHVJRYHUQDQFHUHIRUPVDQGUHYLYDOLQJURZWKVHQVH[LVH[SHFWHGWRUHDFKE\,QGLYLGXDOZHDOWKLQ)

15

ODUJHVWDVVHWFODVVDPRQJWKHYDULRXVLQGLYLGXDODVVHWFODVVHVLWORRNVWRRYHUWDNH)L[HG'HSRVLWV%RQGVLQ)

4.4 Saving Deposits'HPDQG'HSRVLWVFRQVLVWRI&XUUHQWDQG6DYLQJV'HSRVLWV7KH,QGLYLGXDOZHDOWKLQ'HPDQG'HSRVLWVVWDQGVDW`/DNK&URUHSavings Bank Deposits:The Individual wealth in Savings Deposits stands at `/DNK&URUHDVRQst0DUFK2014, marking a growth of 7.96% over FY13.7KLVLQFUHDVHLVKRZHYHUOHVVDVFRPSDUHGWR\HDURQ\HDULQFUHDVHLQ)

5HJLRQDO'LVWULEXWLRQRI,QGLYLGXDO:HDOWKKHOGLQ6FKHGXOH&RPPHUFLDO%DQN6&%Deposits (Current, Savings and Term Deposits)

+RXVHKROG VHFWRUZLWK22 VKDUHZDV WKHODUJHVWFRQWULEXWRULQWRWDOGHSRVLWVDVRQst 0DUFK0HWURSROLWDQEUDQFKHVIROORZHGE\XUEDQDQGVHPLXUEDQEUDQFKHVFRQWLQXHGWR OHDG GHSRVLW JHQHUDWLRQ E\ 6FKHGXOH&RPPHUFLDO %DQNV PDLQO\ LQ WKH IRUP RIWHUP GHSRVLWV 6DYLQJV GHSRVLWV GRPLQDWHGLQ UXUDO EUDQFKHV IROORZHGE\ WHUPGHSRVLWV0HWURSROLWDQ8UEDQ EUDQFKHV FRQWULEXWHGDERXWRI WKH WRWDOGHSRVLWV IROORZHGE\6HPLXUEDQDQGUXUDOEUDQFKHV5HJLRQZLVH6RXWKHUQ5HJLRQIROORZHGE\:HVWHUQ5HJLRQFRQWULEXWHGWRKDOIRIWKH,QGLYLGXDOZHDOWKKHOGLQGHSRVLWVZLWKWKH6&%V1RUWK(DVWHUQ5HJLRQDFFRXQWHGMXVWRIWKHWRWDOLQGLYLGXDOZHDOWKLQ'HSRVLWV

7DEOH5Hgion-Wise Distribution of Individual Wealth held in Deposits with SCBs

5HJLRQ Amount (` Cr.) Proportion (%)6RXWK 24North 22&HQWUDO 15(DVWHUQ 14West 231RUWK(DVW 2$VSHUWKHW\SHRIGHSRVLWVDOOWKHUHJLRQVIROORZHGWKHVDPHWUHQGDVPRVWRIWKHZHDOWKZDVSDUNHGLQ7HUP'HSRVLWVIROORZHGE\6DYLQJ'HSRVLWVDQG&XUUHQW'HSRVLWV

Figure 11: Household Bank Deposits

5%,

Rural10% Semi-Urban

14%

Urban/Metropolitan

76%

Figure 10:

Distribution of Depositsaccording to area

0.00

100000.00

200000.00

300000.00

400000.00

500000.00

600000.00

700000.00

` Cr

ore CURRENT

SAVINGS

TERM

4.5 Cash&DVKLVHVWLPDWHGXVLQJWKHFXUUHQF\LQSXEOLFFLUFXODWLRQJXUHVUHOHDVHGE\WKH5%,HYHU\ZHHN,WLQFOXGHVQRWHVDQGFRLQVThe table shows that as on 31st0DUFK`13 Lakh Crore worth RIFDVKLVLQWKHKDQGVRISXEOLF7KHSHUVLVWHQWLQDWLRQVLQFHVLWXDWLRQKDV UHVXOWHG LQ WKH5%, WDNLQJ OLTXLGLW\FRQWUROPHDVXUHVDQGLQIXVLQJOHVVFDVKLQWKHV\VWHPZKLFKH[SODLQVWKHGHFOLQLQJUDWHRIFXUUHQF\LQFUHDVH

Table 16: Individual Wealth in Cash

Year Amount (` Cr.) YOY Growth (%)2014 2013 2012 2011 2010

Figure 12: Cash held by Individuals

4.6 Provident Fund7KHUHDUH WZR W\SHVRI SURYLGHQW IXQGH[LVWLQJ LQ ,QGLD HPSOR\HHVSURYLGHQW IXQGDQGSXEOLFSURYLGHQWIXQG%RWKDUHLQWHQGHGDVDVDYLQJFXPLQYHVWPHQWWRROIRUORQJWHUPDQGKDYHORZOLTXLGLW\3HRSOHLQYHVWLQWKHVHWREXLOGWKHLUUHWLUHPHQWFRUSXV

(PSOR\HHV3URYLGHQW)XQG(PSOR\HH3URYLGHQW)XQGLVDPDQGDWRU\UHWLUHPHQWEHQHWDSSOLFDEOHRQO\WRVDODULHGHPSOR\HHV,WLVIXQGWRZKLFKERWKWKHHPSOR\HHDQGHPSOR\HUFRQWULEXWHRIWKHIRUPHUVEDVLFVDODU\DPRXQWHDFKPRQWK(3)DFFRXQWVZLOOQRZ\LHOGDUHWXUQRIDQQXDOO\,Q(3)WKHDPRXQWLVSDLGDWWKHWLPHRIUHWLUHPHQWRUUHVLJQDWLRQZKLFKHYHURFFXUVHDUOLHU7KHDPRXQWLQYHVWHGLQDQ(PSOR\HHV3URYLGHQW)XQGLVH[HPSWIURPWD[XQGHU6HFWLRQ&RIWKH,QFRPH7D[$FW,WLVDGPLQLVWHUHGE\(3)27KLVVFDOVDZDULVHRILQWKH(3)ZKLFKQRZVWDQGVDW`4.74 Lakh Crore.

0

200000

400000

600000

800000

1000000

1200000

1400000

2010 2011 2012 2013 2014

` Cr

ore

3XEOLF3URYLGHQW)XQG7KLV LVDYROXQWDU\VFKHPHDGPLQLVWHUHGE\ WKH1DWLRQDO6DYLQJV ,QVWLWXWH3RVWRIFHVDQGDVSHFLHGOLVWRIEDQNVLVDOORZHGWRWDNHGHSRVLWVIRUWKLVIXQG7KHFXUUHQWUDWHRILQWHUHVWRIIHUHGLVDQQXDOO\,QYHVWPHQWXSWR,15SHUDQQXPTXDOLHVIRU,75HEDWHXQGHU6HFWLRQ&RI,7$FW

Table 17: Assets In Provident Fund

Composition of PF FY14 (` Cr.) FY13 (` Cr.) YOY Growth (%)(PSOR\HH3URYLGHQW)XQG 23 33)ZLWK3RVW2IFH 33)ZLWK%DQNV Total 7,36,096 5,24,300 40.39

7KHFRQYHQLHQFHIDFWRURQOLQH33)DFFRXQWHDV\UHDFKHWFLVUHVSRQVLEOHIRUEDQNVKDYLQJDODUJHUVKDUHRI33)'HSRVLWVZKHQFRPSDUHGWRSRVWRIFHVThe individual wealth in provident funds is `7.36 Lakh Crore with 40.39% YOY growth.$PDMRUFRQWULEXWRUWRWKLVLQFUHDVHLVWKHLQFUHDVHLQ%DQN33)'HSRVLWV

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st0DUFKLV` 6,22,33724 Crore. The 15,GHSRVLWVLQFUHDVHGE\DVFRPSDUHGWR)

20

6PDOO6DYLQJV)LVFDOVDZWKHVPDOOVDYLQJVFDWHJRU\GHFOLQHE\DVDUHVXOWRIWKHGHFOLQLQJVDYLQJVUDWHVDZDVDYLQJVUDWHRIRI*'3DIRXUWKFRQVHFXWLYHIDOOIURPWKHKLJKRILQ7KLV\HDUWKHVPDOOVDYLQJVSRVWHGDJURZWK5XUDO ,QGLDDFFRXQWV IRURI WKHFRXQWU\V WRWDO LQFRPHDQGSHUFHQWRI,QGLDVVDYLQJV3HRSOHLQYLOODJHVDQGVHPLXUEDQDUHDV DUH SDUNLQJ PRQH\ LQ SRVW RIFH GHSRVLWV DQG QDWLRQDOVDYLQJVFHUWLFDWHV LQVWHDGRI WKHXVXDOSUDFWLFHRIEX\LQJJROGZLWKWKHLUH[WUDFDVK&RQWULEXWLRQRIDJULFXOWXUHWR*'3KDVLQFUHDVHGIURPODVW\HDUWRWKLV\HDUThe Individual Wealth in Small Savings stands at `/DNK&URUH

Table 19: Individual Wealth held in Small Savings

Type FY14 (` Cr.) FY13 (` Cr.) YOY Change (%)

3RVW2IFH0RQWKO\,QFRPH6FKHPH .LVDQ9LNDV3DWUD 3RVW2IFH5HFXUULQJ'HSRVLW$FFRXQW 16&LVVXHV 3RVW2IFH7LPH'HSRVLW$FFRXQW 3RVW2IFH6DYLQJV%DQN$FFRXQWV 6HQLRU&LWL]HQV6DYLQJ6FKHPH 2WKHU&HUWLFDWHV 1DWLRQDO6DYLQJV6FKHPH ,QGLUD9LNDV3DWUD Total 5,65,016 2.45

4.9 Mutual Funds$VVHWV8QGHU0DQDJHPHQW$80LQ0XWXDO)XQGVDVDSHUFHQWRI*'3IRU,QGLDLVVLJQLFDQWO\ORZHU WKDQVRPHRWKHUHPHUJLQJHFRQRPLHV IRUH[DPSOH IRU%UD]LODQGDURXQG IRU6RXWK$IULFD7KLV LQGLFDWHVVLJQLFDQWKHDGURRPIRUJURZWK%XW WKHFXUUHQWGRPHVWLFDQGJOREDOHFRQRPLFFRQGLWLRQVDUHDFWLQJDVDGHWHUUHQWWRWKHJURZWK7KRXJKWKH$80LQWKHPXWXDOIXQGVKDVLQFUHDVHGWR25 /DNK&URUHDQ

21

*LOWIXQGVZHQWRXWRIDYRUDQGWKHFDWHJRU\ZLWQHVVHGGHFOLQHLQRYHUDOOIROLRFRXQWDORQJZLWKDGHFOLQHLQ$807KLVZDVGXHWRRQJRLQJXQFHUWDLQW\LQLQWHUHVWUDWHHQYLURQPHQWDPLGSHUVLVWHQWKLJKLQDWLRQ'HEWIXQGVKDYHEHHQVHHLQJDULVHLQLQYHVWRUDFFRXQWVVLQFH0DUFKDQG)

22

4.11 Alternative Assets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

Category Sub-Categories

&DWHJRU\ ,QIUDVWUXFWXUH)XQGV9HQWXUH&DSLWDO)XQGV60()XQGV6RFLDO9HQWXUH)XQGV&DWHJRU\ 3ULYDWH(TXLW\'HEW)XQGV&DWHJRU\ +HGJH)XQGV

&DWHJRU\,LVRIIXQGVZKLFKPLJKWKDYHDVSLOORYHULPSDFWRQWKHHFRQRP\DQGDUHHOLJLEOHIRUFHUWDLQFRQFHVVLRQV&DWHJRU\,,KDVQRVXFKFRQFHVVLRQVRU LQFHQWLYHV&DWHJRU\,,, LQFOXGHVWKRVHZKLFKFDQOHYHUDJHWKHLUWUDGHVDQGKDYHQRVSHFLFFRQFHVVLRQV7KHUHDUHFXUUHQWO\UHJLVWHUHG$,)VXQGHUWKLVUHJXODWLRQDVRQ0DUFKst$OWHUQDWH,QYHVWPHQWIXQGVUDLVHGDURXQG` 32 &URUHXSE\DVFRPSDUHGWRSUHYLRXVTXDUWHU7KH$,)VKDYHJDUQHUHGFRPPLWPHQWVRI`33&URUHXSRYHUWKH'HFHPEHUTXDUWHUThe LQGLYLGXDOZHDOWKLQDOWHUQDWLYHDVVHWVLQFOXGLQJRWKHUDVVHWVDORQJZLWK$,)VLVHVWLPDWHGto be `23,727 Crore in FY14.

Table 21: Composition of Individual Wealth in Alternative Assets

Asset Class Amount (` Cr.) Proportion (%)+LJK

23

High Yield Debt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`6,162 Crore.

3ULYDWH(TXLW\)XQGV3ULYDWH(TXLW\)XQGVLQYHVWLQSULYDWHFRPSDQLHVZKRVHRZQHUVKLSVKDUHVRUXQLWVDUHQRWWUDGHGSXEOLFDOO\$VDJDLQVW9HQWXUH&DSLWDO IXQGVZKLFK WDUJHWHDUO\VWDJHFRPSDQLHV3ULYDWH(TXLW\IXQGVLQYHVWLQPRUHPDWXUHFRPSDQLHV7KH WRWDOZHDOWK LQ3ULYDWH(TXLW\ )XQGV LV DERXW `&URUH7KLV LQFOXGHV3ULYDWH(TXLW\)XQGVXQGHUWKH9&)UHJXODWLRQVDQG$,)UHJXODWLRQV0D\XQGHUFDWHJRU\7KRXJKWKH$,)UHJXODWLRQVUHSODFHWKH9&)UHJXODWLRQV IXQGVXQGHU9&)ZRXOGEHFRQWLQXHGXQOHVV WKH\DUHZRXQGXS7KH3ULYDWH(TXLW\ IXQGVDFFRXQWHGKHUHDUH IURP WKHVHFWRUV OLNH,QIRUPDWLRQ7HFKQRORJ\7HOHFRPPXQLFDWLRQV3KDUPDFHXWLFDOV%LRWHFKQRORJ\6HUYLFHVHFWRUV,QGXVWULDOSURGXFWDQGRWKHUV,QGLYLGXDO:HDOWKLQ3ULYDWH(TXLW\IXQGVLVHVWLPDWHGDW`5,279 &URUHDQLQFUHDVHRIRYHU)

24

LQFUHDVHRIDERXWRYHU)

25

,QIUDVWUXFWXUH)XQGV7KH,QGLDQHFRQRP\UHTXLUHVKXJHLQYHVWPHQWVLQGHYHORSLQJLQIUDVWUXFWXUHOLNHURDGVDQGSRZHU,QIUDVWUXFWXUHIXQGVZHUHLQWURGXFHGWRFKDQQHOL]HLQYHVWPHQWVLQWRWKHVHFRPSDQLHVDQGWKXVPDNHPRQH\ IRU LQYHVWRUV5HJLVWHUHGXQGHU&DWHJRU\XQGHU WKH$OWHUQDWH ,QYHVWPHQW IXQGUHJXODWLRQE\6(%, LQ0D\ ,QIUDVWUXFWXUH)XQGVJDUQHUHGD OLRQVVKDUH LQ$,)&DWHJRU\LQ)

Section 5:

Asset wise Break-Up of Individual Wealth held in Physical Assets in India3K\VLFDO$VVHWVFRQVLGHUHGWRDUULYHDW,QGLYLGXDOZHDOWKLQWKLVUHSRUWDUHx *ROGx Real Estatex 'LDPRQGx 6LOYHUx 3ODWLQXP

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Table 23: Composition of Individual demand in terms of Jewelry and Bars and Coins Investment

Period Jewelry Bars and Coins Total Q1 FY14 122 310Q2 FY14 Q3 FY14 Q4 FY14

Source: World Gold Council

Figure 13: Quarterly Demand of Jewelry and Bars and Coins Investment

Table 24: Composition of Individual Demand in Gold (in tons)

5HJLRQ FY13 FY14 YOY Change (%),QGLD :RUOG 7KHGHPDQGIRUWKHSK\VLFDOJROGLQ,QGLDGHFUHDVHGLQ)

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30

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5.4: Silver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he total household wealth that is FKDQQHOL]HGLQWRVLOYHULVHVWLPDWHGWREH`1.9 Lakh Crore.

5.5: Platinum3ODWLQXPMHZHOU\LVRQWKHULVHLQ,QGLD,WLVHDWLQJLQWRWKHWUDGLWLRQDOJROGVHJPHQWPDLQO\EHFDXVHRIFKDQJLQJFRQVXPHUSUHIHUHQFHV,QGLDQPHQIURPXSSHUPLGGOHFODVVZKRDUHLQWKHDJHJURXSRI\HDUVDUHHPEUDFLQJSODWLQXPVRPXFKWKDWPHQVMHZHOU\WRGD\FRQWULEXWHVWRQHDUO\RIWKHRYHUDOOVKDUHRISODWLQXPMHZHOOHU\VDOHV

$OVRSULFHYRODWLOLW\DQGLPSRUWFXUEVRQ*ROGKDYHERRVWHGWKHVDOHVRISODWLQXPMHZHOU\LQ,QGLD7KH ,QGLDQ MHZHOU\PDUNHWKDVZLWQHVVHGDVWDJJHULQJJURZWKRI SHUFHQW LQ WKHSODWLQXPMHZHOU\VHJPHQWLQ7KHSULFHJDSEHWZHHQJROGDQGSODWLQXPKDVQDUURZHGIURPWRQRZ *ROG`JP3ODWLQXP`JPThe total Individual Wealth in the form of Platinum stands at `&URUHXSIURP`3,466 Crore in FY13.

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31

Section 6:

Individual Wealth-India versus World7DEOH EHORZ VKRZV WKH SURSRUWLRQ RI LQYHVWPHQWV LQNH\DVVHWFODVVHVE\,QGLYLGXDOVLQ,QGLDDQGJOREDOO\$V LW LVHYLGHQW IURP WKH WDEOHEHORZ LQYHVWPHQWV LQGHEWLQVWUXPHQWVLVKLJKHVWDPRQJDVVHWFODVVHVERWKJOREDOO\DQGLQ,QGLD

Table 26: Individual Wealth-India versus World

.H\$VVHW&ODVVHV India (%) Global (%)(TXLW\ 13 25'HEWLQFOXGLQJ&DVK 43$OWHUQDWH$VVHWLQFOXGLQJ*ROGDQGRWKHUSUHFLRXVPHWDOVDQGJHPV 13Real Estate 20 Total 100 100

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32

Section 7:

Survey on HNI Investment Behavior in India.DUY\3ULYDWH:HDOWKFRQGXFWHGDSULPDU\UHVHDUFKWRJDXJHWKHLQYHVWPHQWEHKDYLRXURI+1,VLQ ,QGLD+1,VZHUHVXUYH\HGDFURVV UHJLRQVDQGFLWLHV LQ ,QGLDDQG WKHLU UHVSRQVHVZHUHUHFRUGHGIRUDVHWRITXHVWLRQVSHUWDLQLQJWRLQYHVWPHQWSDWWHUQVDQGEHKDYLRXU

)ROORZLQJLQVLJKWVZHUHGUDZQIURPWKHUHVHDUFKRQ3ULPDU\6RXUFHRI:HDOWK :KHQDVNHGDERXWZKDWLVWKHLU3ULPDU\6RXUFHRIZHDOWKRIWKHUHVSRQGHQWVVDLGWKDWWKHLULQYHVWDEOHZHDOWKFRPHVIURPWKHDFFXPXODWLRQRIVDYLQJVZKLFKWKH\GLGZKLOHWKH\ZHUHZRUNLQJRIWKHUHVSRQGHQWVKDGWKHLUZHDOWKFUHDWHGIURP(QWUHSUHQHXUVKLSZKLOHWKHUHPDLQLQJKDGWKHLUZHDOWKIURP,QKHULWDQFH

3ULQFLSOHRI$VVHW$OORFDWLRQ:KHQDVNHGZKHWKHUWKH\DOZD\VIROORZWKHLUDVVHWDOORFDWLRQSULQFLSOHRUFKDQJHDFFRUGLQJWRWKHUHFHQWWUHQGVVDLGWKDWWKH\FKDQJHDVSHUWKHUHFHQWWUHQGZKHUHDVRIWKHPIROORZWKHVDPHSURSRUWLRQRILQYHVWLQJLQGLIIHUHQWDVVHWFODVVHV

,QYHVWPHQWVLQ5HDO(VWDWH5HDO(VWDWHIRUPVDPDMRUSDUWRI+1,VSRUWIROLRRI,QYHVWPHQW:KHQDVNHGZKHWKHUWKH\RZQHGDVHFRQGKRPHVDLGWKDWWKH\KDYHSDUNHGWKHLUPRQH\LQWRUHDOHVWDWHZKHUHDVRQO\GHQLHGKDYLQJVXFKDQLQYHVWPHQW,WZDVDOVRREVHUYHGWKDWUHDOHVWDWHDVDVHFWRULVJDLQLQJLPSRUWDQFHIRU+1,VDVPRVWRIWKHPDOVRLQYHVWHGLQRWKHUIRUPVRIUHDOHVWDWHLQYHVWPHQWV2WKHUWKDQLQYHVWLQJGLUHFWO\LQWR6HFRQGKRPHV5HDO(VWDWH1&'VDUHEHFRPLQJSRSXODUDPRQJ+1,V

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Figure 15:$VVHW$OORFDWLRQ3ULQFLSDO

Figure 14:3ULPDU\VRXUFH

of wealth

Entrepreneurship31%

Inheritance11%

Work Benefits

58%

Change 46%Follow the

same51%

Not Applicable 3%

33

Figure 16: 3HUFHQWDJHRIUHVSRQGHQWVKDYLQJD6HFRQG+RPH

Trend in Corporate FDs Investment8QGHUWKHQHZ&RPSDQLHV$FWWKHFRPSDQLHVDUH UHTXLUHG WR LQVXUH WKH GHSRVLWV WDNHQ IURP WKHSXEOLF7KLVZDVGRQHEDVLFDOO\ WR FXUE LQYHVWPHQWIUDXGXOHQW VFKHPHV +RZHYHU WKLV VRPHZKDWLPSDFWHG WKH RQFH SRSXODU &RPSDQ\ )'V DPRQJWKH +1,V :KHQ DVNHG ZKHWKHU WKH\ LQYHVWHG LQ&RPSDQ\)'VLQ)

34

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Figure 20:

3UHIHUHQFHIRU$VVHW&ODVVHVLQ)

35

Section 8:

Future of Indian Individual Wealth2SWLPLVP LV EDFN LQ WKHHFRQRP\DQGPDQ\HFRQRPLF LQGLFDWRUV VKRZ WKDW WKHZRUVW IRU WKHHFRQRP\LVQRZRYHULPSURYHG,,36HUYLFHVKDYHVWDUWHGVKRZLQJJURZWK7KHQHZJRYHUQPHQWZLWKQRIHDURIWKHSROLWLFDOFKDLQVRIFRDOLWLRQFDQWDNHEROGGHFLVLRQVZKLFKZLOOWDNHWKHHFRQRP\RQDKLJKJURZWKSDWK(TXLW\ZLOO UHDS WKHPD[LPXPEHQHWVRI WKLV JURZWKZLWK WKH VHQVH[H[SHFWHGWRDWWDLQOHYHOVE\

*'3JURZWKUDWHVRIWRDUHH[SHFWHGIRUWKHQH[WYH\HDUVWDNLQJWKHQRPLQDO*'3RI)

7DEOH3URMHFWHG)LQDQFLDO:HDOWK$VVHW&ODVV:LVH'LVWULEXWLRQLQFY19

Asset Class FY14 (` Cr.) FY19 (` Cr.) &$*5'LUHFW(TXLW\ ,QVXUDQFH )L[HG'HSRVLWV 6DYLQJV'HSRVLWV 3URYLGHQW)XQG Cash 0XWXDO)XQGV 15,'HSRVLWV 6PDOO6DYLQJV &XUUHQW'HSRVLWV %RQGV 3HQVLRQ)XQGV $OWHUQDWLYH$VVHWV ,QWHUQDWLRQDO$VVHWV Total 1,34,71,160 3,16,74,990

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Future Trends

7KHZHDOWKKHOGE\LQGLYLGXDOVLQQDQFLDODVVHWVKDVJURZQE\LQWKHODVW\HDUVDWD&$*5RI&RQVLGHULQJWKHIDFWWKDWWKHHFRQRP\KDGQRWVKRZQKHDOWK\JURZWKLQWKLVSHULRGWKLVJLYHVDQLQGLFDWLRQRIKRZZHDOWKZLOOJURZZKHQWKH,QGLDQHFRQRP\GRHVZHOOLQWKHQH[W\HDUV

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About Karvy

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