Direct equity investments continue to be the favourite of investors, growing 6.39 per cent in 2018/19, in spite of stock markets remaining lacklustre and volatile in the last one year. At Rs 52.10 lakh crore, investments in direct equity comprise one-fifth financial assets, which saw investments by individuals, according to Karvy India Wealth Report 2019.
"This shows the belief of investors in the Indian equity markets, notwithstanding the volatility it has been through. We believe India's drive towards a $5 trillion economy will have a cascading positive effect on individual wealth," Abhijit Bhave, CEO, Karvy Private Wealth, said at the release of the company's India Wealth Report 2019. "The recent landmark move by the finance minister to reduce corporate tax will give a generous fillip to our ailing economy and have a positive effect on the stock market," he added.
Bank deposits, the second biggest in volume, saw growth of 8.85 per cent to Rs 45.82 lakh crore. The popularity of mutual funds has also picked up. This is evident from the higher systematic investment plan (SIP) inflows and an exponential increase in assets under management. Data shows a net inflow of Rs 92,693 crore in MFs through SIPs, an 38 per cent increase over FY18. Total individual wealth in MFs in India in 2018/19 stood at Rs 13.77 lakh crore, an increase of 18 per cent over the previous year. Alongside, individual wealth in the country grew 9.62 per cent to Rs 430 lakh crore, continuing the acceleration over the last few years. A majority of this growth was achieved by 10.96 per cent rise in wealth creation by financial assets as compared to physical assets, which grew 7.59 per cent, the report said.
Individual investors continued moving their wealth from physical assets to financial assets. The proportion of financial assets has moved up to 60.95 per cent from 57.25 per cent in the last five years.
Individual wealth in physical assets rose 7.59 per cent as gold and real estate covered 92.57 per cent of the space. The total wealth held by individuals in the physical form stood at Rs 167 lakh crore. Individual wealth in gold stood at Rs 80.95 lakh crore, an 8.63 per cent increase over the previous fiscal. Real estate followed with Rs 74.52 lakh crore, rising by 7.13 per cent, it added.