Rupee depreciation has hit the overseas shopping spends of households with Ultra High Net-worth Individuals . These are households with a minimum average net worth of Rs 25 crore accumulated over the last ten years, and who invest their surplus income in various asset classes including debt, equity, commodities and currency.
The increasing availability of global brands domestically is prompting them to shop in India, says the Kotak Wealth – Crisil 2012 report. This is a reversal of last year when ultra HNIs shopped mainly abroad. However, HNIs in non-metros still prefer to shop overseas, said the report. There has been a 50 per cent increase in the inclination to spend towards apparel and accessories.
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The number of Ultra HNI households has grown by 30 per cent to 81,000 in 2011-12. This number is expected to more than treble (to 286,000) in the next five years. The net worth of these households is estimated to touch Rs 318 lakh crore by 2016-17 from Rs 65 lakh crore as at FY12.
There is an increasing tendency among Ultra HNIs to invest in low risk debt instruments compared with the previous year. Investment into debt has increased from 20 per cent in FY11 to 29 per cent in FY12. Investment in equity has remained flat at 34 per cent of their portfolio compared to the previous fiscal.
Exposure to alternative assets has increased to 9 per cent from 7 per cent. However, share of real estate in their portfolio has declined from 37 per cent to 30 per cent in 2011.
About 150 ultra HNIs were surveyed between December 2011 and April 2012 for the ‘Top of the Pyramid’ report.
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