MUMBAI: These are painful times for India's tycoons, the Forbes Asia Rich List said recently. Richest Indians Old Horses of India Inc Tycoons with a golden heart Modern Moguls .
A falling stock market, a weak rupee and slowing economic growth have shaved about 60 per cent off the wealth of India's 40 richest people, it said in its annual compilation, with their net worth plunging to $139 billion from $351 billion a year ago. No small change that, and it's got to hurt. "They're definitely feeling the pain," said Sonu Bhasin, president of retail finance at Axis Bank, and head of the bank's private banking and wealth management divisions, which have nevertheless continued to add new clients in recent months. "Everyone's hurting, everyone's in a panic, but the wealthy get noticed more and their concerns get addressed," she said. An economy that grew at about 9 per cent in the last three years and a six-year bull run on the stock market helped mint new millionaires in Asia's third-largest economy, a rich class who splashed out on luxury cars, yachts and sprawling vacation homes. India had 123,000 millionaires in 2007 and showed the fastest pace of expansion, a Merrill Lynch/Capgemini report said. But a stock market rout has meant local investors have "notionally lost almost a year's GDP", Credit Suisse said. Bhasin's clients, who are high net-worth individuals, are seeking more professional advice now, and also favouring more traditional investment options such as bank deposits, she said. "They are seeking safety: fixed deposits are making a huge comeback, and there is also some interest in gold," Bhasin said. "We've always told clients making money is a boring exercise. Now they're being more realistic and willing to be bored." BILLIONAIRE NO MORE The reality is harsh for steel baron Lakshmi Mittal, chief of Arcelor Mittal, the world's top steelmaker, who gave up his No. 1 position on the Forbes list because of crashing prices. The new No. 1, Mukesh Ambani, chief of India's top private company Reliance Industries, has a net worth of about $21 billion, Forbes estimates, down 58 per cent from last year. That does not seem to have hit construction of his $1 billion home on Mumbai's Altamount Road, among the most expensive stretches of residential real estate in the world, even though other luxury apartments in the city are finding few takers. "In the home segment of more than 100 million rupees ($2 million), demand is very weak because it is linked to big bonuses and stock market Richest Indians Old Horses of India Inc Tycoons with a golden heart Modern Moguls returns, which have taken a hit," said Abhisheck Lodha, a director at developer Lodha Group in Mumbai. Real estate tycoons such as top realtor DLF's KP Singh have seen the biggest wealth erosion this year, Forbes noted, while windmill maker Suzlon's founders have lost their billionaire status and flamboyant liquor baron Vijay Mallya, head of the UB Group, has dropped off the Forbes list on losses to his airline. "Business founders were the worst hit as the largest shareholders," said the Credit Suisse report, which estimated the top 20 business groups in India have lost about 71 per cent of the value of their listed investments, or $226 billion, this year. ART, CARS, WINE But while the notional value of their wealth has taken a hit, India's billionaires still have plenty of loose change for luxury cars, art and wines. Sales of cars priced at more than 2 million rupees have remained strong, bucking the slump in overall car sales. Car sales fell nearly 7 per cent from a year ago in October, but Mercedes-Benz has already met its full-year target with a 47 per cent increase, while BMW's sales have more than doubled. Perhaps the wealthy will drive their new cars to the upcoming Osian's auction of modern and contemporary Indian art and craft. Chairman Neville Tuli is confident there will be bidders for at least half the collection even "in a worst-case scenario", compared to auctions in New York recently, where sales were less than half what they were a year ago and a majority of works were offered at prices far below their presale estimates. "The Indian economy is stronger than the economies of Europe and the United States, so our art market's stronger," Tuli said, noting there were several new guests at the recent preview. "The art market's really dependent on collectors who, irrespective of what is happening in the rest of the world, will still allocate resources to art. That's their first priority." As for premium spirits, demand is strong, said Vishal Kadakia at importer Wine Park and de facto head of the Bombay Wine Club. "The alcohol industry is probably the most recession-proof." "When times are bad, everyone wants a drink," he said. N.Sukumar Research Analyst www.kences1.blogspot.com --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
