In the light of strong market gains and optimism surrounding the reform agenda of a new government, the wealth and number of UHNW individuals in India is increasing.

The wealth of ultra high net worth individuals in India is expected to rise by 23 per cent during the latest financial year period for 2015, with total wealth standing at $1.964 trillion, according to a survey of trends by EY (formerly Ernst & Young) and Kotak Wealth Management.

The number of UHNW individuals is expected to expand by 17 per cent to 137,100, the report said.

The upsurge in wealth of the most well-heeled citizens of the country comes against a background of increasing economic optimism and a rising market – albeit with some recent wobbles – since last year’s election of a new government in the country that says it has pledged itself to widespread structural reform.

“This optimism about the new government has led to 62 per cent of UHNW individuals increasing their investments into primary businesses,” the report said, adding that most spending categories also saw increases. Philanthropy continues to be an important area of spending with education and healthcare as the most supported causes.

During the latest financial year period, UHNW individuals hiked their allocation to equities to 45 per cent from 38 per cent, with a consequent reduction in exposure to real estate and debt markets. The tangible nature of property, however, makes it attractive as an asset class: more than 90 per cent of persons surveyed have exposure to this asset class in addition to primary residences.

“Residential properties are top preferences of 47 per cent of UHNW individuals with growing investments such as Bengaluru and Pune. They also purchase offshore real estate in London, Dubai and Singapore, either to make second homes in cities they frequent or as holiday homes,” the report said.

The report, entitled Top of the Pyramid, was based on a market survey of 225 UHNW individuals by Feedback Consulting, carried out from February to May 2015, involving face-to-face interviews in Delhi, Mumbai, Kolkota, Chennai, Pune, Bengaluru, Lucknow, Chandigarh, Coimbatore, Ahmedabad, Hyderabad and Augrangabad. Luxury service providers were also interviewed, along with wealth managers and real estate firms and entrepreneurs.

India’s economic performance serves as a key driver for the general trend in population growth and wealth of the ultra high net worth segment; in the 2015 financial year, provisional gross domestic product rose 7.3 per cent year-on-year, beating the 4.7 per cent out-turn for the previous 12-month period. The country, the report said, is on track to be a $2 trillion economy.