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India's Ultra-Rich Favor Growth Assets in Tier 1 & 2 Cities, New Report Reveals

India's ultra-high net worth individuals show a strong preference for growth-oriented investments, particularly in tier 1 and 2 cities, where over half allocate more than 80% of their portfolios to such assets. Second-generation UHNIs exhibit higher return expectations, with 40% targeting over 16% portfolio returns compared to 33% among the first generation. However, intergenerational wealth transition remains underdeveloped, with only 31% having essential frameworks in place and just 21% establishing formal trusts. The report also highlights that Europe is the favored luxury destination, while a majority invest in passion assets like art and collectibles, reflecting a shift toward purpose-driven wealth deployment.

Key Points: India's UHNIs Invest in Growth Assets, Tier Cities: Report

  • 54% in tier cities allocate >80% to growth
  • 40% of 2nd-gen target >16% returns
  • Only 31% have essential wealth transition frameworks
  • Europe is top luxury destination
2 min read

India's ultra-rich prefer to invest in growth assets, especially in tier 1 and 2 cities

Nuvama report shows India's ultra-rich prefer growth assets in tier 1 & 2 cities, with intergenerational wealth transition still evolving.

"India's wealth story continues to evolve, shifting from preservation to purpose-driven deployment. - Ashish Kehair, MD & CEO, Nuvama"

Mumbai, Dec 24

India's ultra-high net worth individuals, representing a cumulative net worth of over Rs 2 lakh crore, prefer to invest in growth assets, particularly in tier 1 and Tier 2 cities, where 54 per cent allocate over 80 per cent of their portfolios to growth capital, compared to 23 per cent in metros, according to a new report.

Second-generation UHNIs demonstrate relatively higher growth expectations, with 40 per cent targeting portfolio returns of over 16 per cent relative to 33 per cent among the first generation, said the report by Nuvama Private, the UHNI business of Nuvama Group.

Intergenerational wealth transition remains a work in progress as only 31 per cent of UHNIs have essential frameworks in place, and just 21 per cent have formal trusts, the findings showed in the first edition of the report, titled 'The Exceptionals'.

"India's wealth story continues to evolve, shifting from preservation to purpose-driven deployment. At Nuvama Private, we see this as a defining moment in India's financial progression, where equity participation, alternatives, and curated investment solutions are shaping a mature ecosystem capable of amplifying capital for generations," said Ashish Kehair, MD and CEO, Nuvama.

These stories reflect this transformation, as India's wealth creators steer the next phase of growth with clarity, confidence, and conviction, he mentioned.

Europe remains the favourite luxury destination for India's UHNIs, with 92 per cent travelling abroad at least twice a year for curated, experiential getaways.

Art and luxury collectibles attract 65 per cent of UHNIs, with 58 per cent investing in passion assets across preferred brands, hobbies, vintage and luxury cars, according to the report.

It documents the personal narratives of India's UHNIs, detailing how they established their businesses through resilience, emotional strength, and long-term vision.

"The Exceptionals delves into the layered facets of India's wealthy individuals, who have built enduring value for their families, ecosystems, and the nation," said Alok Saigal, President and Head, Nuvama Private.

- IANS

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Reader Comments

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Priya S
The shift to tier 1 & 2 cities is smart. Real estate in metros is saturated and overpriced. Cities like Indore, Coimbatore, and Chandigarh have huge growth potential. Their kids aiming for 16%+ returns shows a different, more aggressive mindset! 💼
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Rohit P
Only 31% have proper frameworks for wealth transition? That's a disaster waiting to happen for many business families. We've seen so many splits and court cases. Estate planning is not just for the West, it's crucial here too.
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Sarah B
Interesting read. The part about "purpose-driven deployment" is key. Hope this means more impact investing in India's social and environmental challenges, not just chasing the highest financial return. That would be a true mark of mature wealth.
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Vikram M
92% travel to Europe twice a year... meanwhile, I'm saving for my first domestic flight 😅. Jokes aside, this capital flowing into tier 2 cities is a big opportunity. Might be time to look at property in my hometown Nagpur.
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Ananya R
The focus on art and collectibles is interesting. It's not just about money, it's about building a legacy and culture. But I wish the report also touched on philanthropy among UHNIs. That's a more meaningful measure of wealth for the nation, in my opinion.

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