India has 1,26,700 dollar mill

There's no dearth of fat cats in India. The number of millionaires in the country grew by more than 50% last year, the second-fastest in the Asia-Pacific region, compared to 2008, according to a study by Merrill Lynch Global Wealth Management and Capgemini.

Last year, India had 1,26,700 people with more than $1 million, or Rs4.6 crore, net worth, compared to 84,000 in 2008. That's about one in 10,000 given India's population of 120 crore. The number of millionaires had plunged in 2008 (from 1,23,000 in 2007) following the global meltdown.

Hong Kong was the fastest dollar-millionaire producer - people with more than a million doubled (104.4% to be exact) in the former British principality. The other nations that saw the rich getting richer fast were China and Brazil.

The number of millionaires in Asia rose to three million, matching Europe for the first time.

An analysis by DNA shows that the wealth of the top 10 billionaires in India grew by 70.3% during the calendar year 2009 - from Rs 3,55,205 crore to Rs 6,05,077 crore. Among them, Cuff Links Tiffany Mukesh Ambani's wealth grew by 75% to Rs1,66,556 crore.

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The two following him on the list - Wipro's Azim Premji and the Vedanta Group's Anil Agrawal - saw their wealth grow by 192.7% and 247.2%, respectively.

"In the case of India, the strong rebound in the numbers of high net-worth individuals is highly correlated to the strong recovery in stock market prices and strong outlook for India's underlying economy," said Pradeep Dokania, chairman, Merrill Lynch Global Wealth Management, India.

Strong government stimulus and a revival in consumer sentiment as a result of which industrial output rose by 10.4% also helped drive GDP growth by 7.4% last fiscal.

The stock markets proffered more than 100% returns in 2009 following a 64.1% decline in 2008.

The Merrill Lynch-Capgemini study reveals the risk appetite, which took a beating post 2007, has started to return among the rich. "The fear which was there in 2008 has gone but the investors still remain cautious. The cash levels are coming down and the investors are again going back to equities and fixed income instruments" said Dokania.

The study, which was conducted using data from IMF, World tiffany heart pendant Bank and other government sources, covered 71 countries that constitute 98% of the world GDP. It showed the population of dollar millionaires world over rose back to 10 million in 2009 and their combined finanical wealth jumped 18.90% to $39 trillion.

The millionaires remain highly concetrated in the US, Japan and Germany, which together account for 53.5% of them. As risk appetite among the rich rises, money allocated by the rich to buy stocks will also increase, said Atul Singh, head of wealth management at Merrill Lynch Wealth Management India.

"We expect the proportion of asset allocation towards equity to increase to 35% by 2011 and cash levels to drop further to 13%. The global investors also seem to be looking for diversification outside their home countries to avoid risks. They are looking for predictable returns by investing in simpler products," Singh said.

Credit:Nitin Shrivastava & Malvika Tegta

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