India’s new Maharajas and their Money Mangers
The Wealth Wallahs
Pages: 209; Price: Rs 499
Throughout human history, there have been people who make money and those who look after their riches. What has transformed over ages is the sophistication of doing both. While the new economy players have transformed ways of doing business and making money, wealth care-takers have evolved, from medieval munshies to modern-day money managers.
There has been an unprecedented shift in the number too. Today, India is home to a multitude of new rich and the count is swelling exponentially. India accounts for the fourth-largest population of high net worth individuals (HNWIs) in the Asia Pacific region with the combined, jaw-dropping wealth of almost $800 billion. “The momentum, and the consequent spike in wealth creation, is likely to continue to with India mopping up both foreign investment and maintaining a study infusion of venture capital and private equity into businesses,” pronounces Sheryasi Singh.
Who are these HNWIs amassing astronomical affluence? Singh puts them into three bins – first-generation entrepreneurs who have gotten rich by business expansion or equity dilution; second-generation entrepreneurs (or the mezzanine generation, as she terms them) where businesses began with previous generation but ballooned in the past decade; and senior corporate cadre in sunshine sectors like IT, technology start-ups, financial services, consulting and so forth.
“This expansion of wealth beyond the clutch of a small group of business families and industrial houses to successful first-generation entrepreneurs as well as strongly emergent cadre of professionals/CXOs mirrors the change in the entrepreneurship and corporate landscape in India in the past two decades,” explains Singh.
That is ‘democratization’ of the investment terrain, with colossal dividends accessible to a wider range of Indians than to the wealthy, politically-connected and land-owning few as in the past. It’s necessary not to equate ‘democratic’ with equal, though. While many Indians are becoming richer, an appreciable percentage subsists in abject poverty.
“The dichotomous truth of a still-poor nation forging rich people at a pace quicker than any other country, despite having one of the highest income inequalities anywhere in the world, has given being-rich a shape-shifting, multi-hued range f connotations,” affirms Singh.
An interesting section of the book is a survey of “nearly sixty wealthy clients’ and their attitudes to wealth, lifestyles, family concerns, charity and so forth. Here is an assortment of major findings: (a) making money neither the motivation nor considered as the only yardstick of achievement; (b) new rich Indians are far from Spartan, and the levels of consumption and indulgence have spiked; (c) nearly three-fourths underplay their wealth because India is an unequal society; (d) new rich bemoan the fact that fellow countrymen continue to harbor a certain suspicion and disregard towards wealthy; (e) new rich have much in common with the well-to-do Americans: (f) they are savers and spend-conscious; (g) they are obsessed with communicating ‘right values’ to their offspring; (h) and are becoming increasingly more philanthropic with significant uptick in the big-ticket donations, among other findings.
The book also chronicles the rise and rise of IIFL Wealth, along with its top honcho Karan Bhagat in lengthy detail, devoting an entire section. “…IIFL Wealth’s journey tips its hat to the remarkable success that smart timing, entrepreneurial dynamism and bit of luck can script in today’s India.” The story of IIFL Wealth along with those of some of the successful first-generation entrepreneurs makes the book an interesting read, especially for the younger, aspirational readers.