India has failed to make any net additions to its high net-worth individual (HNI) population since 2017, a Capgemini report showed. The Capgemini World Wealth Report which is released every year records investment trends among the affluent. The country’s HNI population surged in 2017 going from 2.19 lakh to 2.63 lakh and has remained stagnant since then. The Capgemini report does not cover data post the covid-19 crisis, meaning that the picture is likely to have worsened since the publication of the report.
After 20% jump in 2017, India’s HNI count fell by 3% in 2018 and rose by almost the same amount in 2019, keeping the HNI population more or less stagnant. A person with investable assets of $1 million or more is defined as an HNI, according to Capgemini. The primary residence, collectibles, consumer durables and consumables are not counted.
In its reports for 2019 and 2020, Capgemini attributed India’s weak performance to a slowing economy and weak equity markets. “While HNI population in India did grow by 2.8% in 2019, India’s performance has been weaker due to impact of a slowing economy and the real estate market as well as relatively weaker growth in market capitalization compared with countries which saw strong HNI population and wealth growth last year," said Elias Ghanem, global head of market intelligence-financial services, Capgemini.
India’s stock market has remained broadly stagnant since 2017 with NSE benchmark Nifty50 only delivering a CAGR of around 3% over the past three years. Mid-cap and small-cap stocks have delivered negative returns over that period after rallying strongly in the preceding three years.
Rajmohan Krishnan, principal founder and managing director of Entrust Family Office concurred. "Over the past three years, key drivers of HNI creation such as real estate, private equity and corporate salaries and bonuses have remained sluggish. There have been very few successful exits from private equity investments, for example. The same is the case with listed equity," he said.