Rashesh Shah: The Wealth Management Opportunity

Source: Edelweiss Conference Call Transcripts Q4FY17

See, the good thing about both Asset Management and Wealth Management is that there is an organic growth because the assets also appreciate. So the average if you see, a 10% to 12% asset appreciation in both Asset Management, Wealth Management is there for everybody.

And then there are fresh assets coming in. So to give you an idea, our estimate is that the current assets under advise for the whole Wealth Management industry is close to about Rs.700,000 crores odd business, Rs. 700,000 crores to Rs. 800,000 crores, which is close to about $120 billion to $130 billion in India.

If you look at most of the other countries which have gone through this development phase, I think our long-term idea is that it ends up being
somewhere between 40% to 50% of our GDP.

So, to give you idea, you are supposed to be 50% of GDP even now, it should be $1.2 trillion, which is currently of only $120 billion.

So,we do think that as GDP grows, like to give you an idea, US assets under advice of Wealth Management industry is 85% to 90% of the GDP, we are expecting in India it should be between 40% to 50% on GDP over the next eight to ten years.

So, we do expect that not only it will grow with the GDP growth but also the percentage of GDP will grow from currently what we think is only about 5% of GDP to at least 40% of GDP over 10 to 15 years, I do not think this will happen overnight. And given that, when you do the math, I think expecting a 30% growth of this industry over the next five, seven years, we do think it is possible.