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Business News/ News / India/  India to have 16 lakh HNIs by 2027: Knight Frank report
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India to have 16 lakh HNIs by 2027: Knight Frank report

The HNI population remained on a growth path registering a YoY growth of 4.5% in 2022 and India’s billionaire population rose by 11% YoY in 2022 compared to the previous year

Shishir Baijal, chairman and managing director of Knight Frank India. Photo MintPremium
Shishir Baijal, chairman and managing director of Knight Frank India. Photo Mint

India’s ultra-high-net-worth individuals (UHNWI) with net worth over $30 million will rise by over half (58.4%) in the next five years. From the last count in 2022, the number is likely to grow to 19,119 individuals in the next five years in 2027, found a new report by real estate agency Knight Frank’s ‘The Wealth Report 2023’. In that year, the billionaire population is also expected to reach 195 from the current 161 individuals in 2022. 

The high-net-worth-individual (HNI) population, with asset value of $1 million and more, which was recorded at 7.9 lakh persons in 2022 will also rise to 16.5 lakh, growing 107% in the five year period.

In 2022, the global population of UHNWIs declined by 3.8%, after a rise of 9.3% in 2021, as the wealth and the investment portfolio of the ultra-wealthy were impacted by economic slowdowns, frequent rate hikes and rising geopolitical uncertainties. 

This was noticed in India too, where the UHNWI population registered a decline of 7.5% YoY in 2022 over 2021 because of the rise in interest rates, the appreciation of the US dollar.

However, the HNI population remained on a growth path registering a YoY growth of 4.5% in 2022 and India’s billionaire population rose by 11% YoY in 2022 compared to the previous year.

Shishir Baijal, the company’s chairman and managing director, said, “India’s hectic development activities in core and non-core sectors has helped accelerate economic growth in recent times. Aligned to that is the country’s position as a global start-up hub creating new wealth. The new opportunities emanating from sectors like global manufacturing in India, infrastructure development, technology start-ups etc. will propel economic momentum and help the cause of wealth creation in the country, leading to the rise in the number of wealthy individuals in India."

According to a study based on the company’s ‘Wealth Sizing Model’, the total net worth required by an individual to be among the top 1% wealth individuals in India is estimated to be $1.7 lakh. The wealth needed to join their ranks varies sharply from country to country. In Monaco, which has the world’s densest population of super-rich individuals, the entry point for the 1% club is $12.4 million. 

This is double the amount needed of the second place country in this study, Switzerland, which has an entry point at $ 6.6 million. For Asia, Singapore has the highest threshold with $3.5 million followed by Hong Kong at $ 3.4 million.

Three out of the top ten highest growth spots across the world were held by Asian markets, Singapore, Malaysia and Indonesia recording between 5% and 7% rise in the ultra-wealthy population. This region is estimated to witness a growth of close to 40% in its ultra-wealthy count in the next five years. By 2027 Asia will be home to 210,175 UHNIs taking over Europe and standing second to the Americas.

The Middle East was the only region with 16.9% growth in UHNWIs and those with $30 million in net assets in 2022. The UAE was the fastest growing country with an 18.1% increase, bringing the number of UHNWIs to 1,116. Saudi Arabia was similar, at 10.4% annual growth.

Africa also proved resilient with 6.3% growth in UHNWIs, while Australasia and the Americas remained largely static with 0.7% and 0.2% growth respectively. Asia’s UHNWI population fell by 6.5% yet three of the top 10 highest growth markets were held by Asian countries – Malaysia, Indonesia and Singapore which saw their wealthy populations expand 7-9%.

Europe was the hardest hit region with declines of 8.5% in the number of UHNWIs. Four-fifths of the region’s countries experienced a decline in their UHNWI population. Of the handful of markets seeing their UHNW population increase were Ireland with 3.9% rise and the wealthy safe haven of Monaco with 0.9% growth.

While the UHNWI population contracted last year, the number of high-net-worth individuals (HNWIs), those with US$1m or more in net assets, expanded by 2.9% to almost 70 million worldwide. The top three countries for HNWI growth were Malaysia, Brazil and Indonesia.

Liam Bailey, global head of research at Knight Frank said, “The fall last year in the total number of UHNWIs globally was due in large part to the weak performing equities and bond markets. On the flip side however, 100 prime residential markets globally saw average price growth of 5.2% and luxury investment assets grew 16% which helped steady the decline. The dip is just that. Taking the longer view, the global UHNW population grew by 44% in the five years to 2022 and, although we forecast growth to slow to 28.5% over the next five years, the recent dip will prove short lived as we adapt to a new economic environment."

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ABOUT THE AUTHOR
Varuni Khosla
Varuni Khosla is a journalist with close to 14 years of experience in writing business news stories for mainstream newspaper companies like Mint and The Economic Times. She reports and writes on luxury and lifestyle brands, hospitality and tourism news, the business of sports, the business of advertising and marketing and alcohol brands.
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Published: 17 May 2023, 07:52 PM IST
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