Top of the Pyramid – a Kotak Wealth Management report on insights, spending and investing habits of Indias Utra HNIs

2. Presentation Flow
► The Report
► Key findings and insights
► Spends
► Investments

3. About the Report
► Top of the Pyramid 2015 compiles insights into the profile of Indian ultra HNIs,
lifestyle and investment patterns
► The report carries a theme which reflects the sentiments of the ultra HNIs
interviewed, along with experiences shared by luxury brands and service
providers
► This year’s theme ‘Gliding on Optimism’ presents some captivating insights that
follow the new government’s confidence-boosting measures and hopes of a strong
economic recovery
► The report also covers
► Luxury Weddings, Foreign Education for Children and Real Estate in the special focus
section
► Growth stories of notable first-generation entrepreneurs of e-commerce companies - Just
Dial’s VSS Mani, Bharat Matrimony’s Murugavel Janakiraman, Carwale’s Mohit Dubey
and Jabong’s Praveen Sinha

4. Key findings and insights
Gliding on Optimism
► Improvement in economic sentiments led by new government’s
confidence-boosting measures and hopes of a strong economic recovery
► Increase in investments into businesses
► Increase in spending on both discretionary and non-discretionary
categories
► Increase in exposure to equity as an asset class
Introduction Spends Investments

5. Ultra HNHs grow by 17 per cent
► Ultra-High-Networth Households (HNHs)
increased to 137,100 in 2014-15 from
117,000 in 2013-14
► Accumulated networth of Rs. 128 trillion
(2014-15)
► Emergence of ultra HNIs in high growth
sectors such as e-commerce and
logistics
Introduction Spends Investments

6. Wealth projections
► Growth projected in the number of
Ultra HNHs and net worth by 2019-20:
► 348,000 ultra HNHs
► Corresponding networth of
Rs. 415 trillion
Introduction Spends Investments

7. City Focus – Lifestyle preferences
► Chandigarh ultra HNIs have
higher spends at 45% of
overall income
► Ahmedabad ultra HNIs have a
higher proportion of
discretionary expenses at
19%
► Chennai ultra HNIs have a
higher proportion of income
allocated for Charity at 9%
compared to national average
Introduction Spends Investments

8. City Focus – Investment preferences
► Chandigarh ultra HNIs prefer physical
assets over financial assets with 54% of
their investments going towards Real
estate
► Ahmedabad ultra HNIs prefer financial
assets over physical assets
► Chennai ultra HNIs are inclined towards
investments in alternate assets such as
gold
Introduction Spends Investments

9. 9
How the Ultra HNIs
Spend

10. High allocation towards spends and
primary business
► Income allocation towards spends and
primary business is maximum at 40%
and 22%
► 62% of ultra HNIs have upped their
investments into primary business and
as many as 45% have increased their
personal investments
► With lower inflation and interest rates, ultra
HNIs allocate major part of their income
towards spends
Introduction Spends Investments
The emergence of e-commerce has disrupted the lifestyle and spending habits of ultra HNIs whereby
they increasingly avail the option of shopping for luxury items through a click of their mouse

11. Online shopping picks up with the boom in
the e-Commerce sector
► Digital usage of ultra-rich is majorly around
instant messaging, mails, and social
networks
► 88% of professionals have their digital
preferences inclined towards spending time
with social circle
► As many as 66% of entrepreneurs and
inheritors spend time planning events with
their social circle
► One that has hit India only recently is an
‘invite only’ network open to select people
► Recently, a Bollywood star announced, at
a launch party in India, an exclusive
international private travel and lifestyle
club, famous among the ultra-rich abroad.
Special social networks are emerging
Introduction Spends Investments

12. Philanthropy focus: Education, Healthcare
are preferred causes
► Ultra HNIs’ philanthropic spends remained largely unplanned
► Education and healthcare are the most supported causes in philanthropy
► These causes might get a push with the reforms planned by the government with policies like
Beti Bachao, Beti Padhao; National Health Assurance Mission
Introduction Spends Investments

13. Analog watches preferred but the trend
of smart watches is catching on
► An Indian luxury watchmaker is creating
watches using coins of historical importance
which can be passed down through
generations as heirlooms
Bespoke handcrafted watches is gaining
ground in India
► With at least 38% ultra HNIs preferring
them, analog watches remain first
choice for most occasions
► There’s a gradual shift expected towards
smart watches
► Association with prominent personalities
are used to create brand awareness and
an aura of exclusivity
► The most expensive variant of a smart
watch launched by a leading technology
company costs over INR 10 lakh
Introduction Spends Investments

14. Special Focus:
Luxury Weddings

15. Preference is for destination weddings
Introduction Spends Investments
► As many as 77% of ultra HNIs prefer India as a wedding destination
► Thailand, France and Spain are becoming highly sought-after wedding locations

16. Deciding location and theme are the
primary activities
► Ultra HNIs spend maximum time on
deciding location (5.8 months) and
theme (5.6 months)
► About 5-7 months of planning goes
into planning a luxury wedding
► 47% and 40% of ultra HNIs prefer
Traditional and Royal themes for
luxury weddings
Introduction Spends Investments
► Along with wedding invites, a Delhi
businessman sent out monogrammed
wallets for men and scarves for
women, sourced from international
luxury brands, each worth Rs 35,000-
80,000
Personalization is key in case of
weddings

17. Focus is on exquisite cuisine and
location
Introduction Spends Investments
► Exquisite cuisine is a priority for 87% of ultra HNIs
followed by wedding location for 74%
► While traditional Indian food is the bare minimum,
fusion food is one of the hottest trends
► Leading brands are increasingly approaching ultra
HNIs with proposals for customized gifts
► A leading industrialist took 30-40 chefs
and ingredients from India to Barcelona
for his daughter’s wedding, to get the
taste just right!
Most ultra HNIs are seasoned globetrotters
who have sampled world cuisines

18. Special Focus:
Foreign Education

19. US and UK are first choice for foreign
education destinations
Introduction Spends Investments
► All-round development and emphasis that
contemporaries make are drivers for foreign
education
► Exposure to business environment and
networking are additional motivations
► 26% and 19% of ultra HNIs have USA and UK
as preferred destinations for foreign education
for children due to distinguished institutes and
high quality of education
► Quality of education, global exposure, and
safety are the key drivers when it comes to
choice of country

20. Under graduation starting point; Career
choice: Family business, consulting firms
► Academic spends, on an average.
constitute 65% of expenses
► 35% and 40% of children of
entrepreneurs and inheritors prefer
joining the family business after
foreign education
► 33% of children of professionals
join a consulting major post foreign
education
► The courses provide networking
opportunities to young adults to take
their businesses to next level with right
collaborations
Global business school have started
tailor-made programs for running family-
managed business
Introduction Spends Investments

21. How the Ultra
HNIs Invest

22. Key wealth drivers: Success in business
and Real estate
► Real estate and success in business
have contributed to wealth of 64% of ultra
HNIs over the years
► Entrepreneurs and Inheritors lay higher
emphasis on their primary business
► 66% of professionals get most of their
wealth from personal income (includes
their salary), and real estate
Introduction Spends Investments

23. Online portals preferred to track
investments
► 74% of ultra HNIs use investment portals to track investments; this is a result of the online
boom
► Traditional investments tracking through wealth management reports is still also a popular
option with 70% of ultra HNI using them
► Websites, television and mobile applications largely play a supporting role
Introduction Spends Investments

24. Exposure to equity increases at the cost
of debt and real estate
► Equity allocation has increased to 45% in
FY15 with a consequential reduction in debt
to 20% and real estate to 25%.
► This is due to increased returns from equity
markets with expectations of reform from the
new government
► In equity markets, over 50% of ultra HNIs
preferred Banking and Infrastructure sectors
in FY15
► Around 50% have shown preference for mid
cap companies in FY15
► Despite the slowdown in real estate, 68% of
ultra HNIs are optimistic about real estate
sector in the future
Introduction Spends Investments

25. Special Focus:
Real Estate
Investments

26. Real Estate: Reliable investment for the
long term
► Over 90% of ultra HNIs have exposure
to real estate
► Ultra HNIs rely on expert investment
advice and self-analysis for real estate
investments
► As many as 48% prefer residential
properties followed by commercial
properties
► Ultra HNIs display a growing preference
for commercial real estate driven by
higher rental realization compared to
residential market
Introduction Spends Investments

27. Non-metros and other towns preferred
Introduction Spends Investments
► Non-metro cities and other towns are
preferred by 75% of ultra HNIs for real
estate investments
► Ultra HNIs usually purchase real estate
overseas either to make second homes
in cities they frequent for business or as
holiday homes
► Metros: Delhi, Mumbai, Chennai, Kolkata
► Non-metros: Bengaluru, Ahmedabad, Pune,
Nagpur, Ludhiana, Hyderabad
► Others: include all other cities
► There is a growing trend of ultra HNIs buying
blocks of apartments and row houses
allowing them to earn a stable rental yield
There are new avenues of real estate
investments made by ultra HNIs

28. Disclaimer and notices
© Copyright Kotak Mahindra Bank Limited *
This report is meant for information purposes only. Reasonable care and caution has been taken in preparing this report. The information
contained in this report has been obtained by from sources which are considered reliable. By accessing and/or using any part of the report,
the user accepts this disclaimer and exclusion of liability which operates to the benefit of Kotak Mahindra Bank Limited (Kotak). Kotak does
not guarantee the accuracy, adequacy or completeness of any information contained in the report and neither shall it be responsible for any
errors or omissions in or for the results obtained from the use of, such information. No third party whose information is referenced in this
report under credit to it, assumes any liability towards the user with respect to its information. Kotak shall not be liable for any decisions
made by the user based on this report (including those of investment or divestiture) and the user takes full responsibility for their decisions
made based on this report. Kotak shall not be liable to any user of this report (and expressly disclaims its liability) for any loss, damage of any
nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential losses, loss of profit, lost business and
economic loss regardless of the cause or form of action and regardless of whether or not any such loss could have been foreseen.
* The report belongs to Kotak. Any third party brands, names or trademarks contained in the report belong to the relevant third parties.
Ernst & Young LLP (EY) is a global leader in advisory, tax, transaction and assurance services. EY is one of the leading service providers to the
financial services industry with functional domain experts in every area of Financial Services - Banking, Insurance, Capital Markets, Treasury,
Wealth Management, Quantitative and Analytics.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a
separate legal entity. Ernst & Young LLP is one of the Indian client serving member firms of EYGM Limited. For more information about our
organization, please visit www.ey.com/in.
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute
for detailed research or the exercise of professional judgment. Neither Ernst & Young LLP nor any other member of the global Ernst & Young
organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this
publication.

29. Thank you