India’s wealth market seen growing to $436 billion by 2034; small, micro-caps in focus: Emkay Wealth

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The wealth manager said rising incomes, financialisation of household savings and increasing participation in capital markets are driving demand for professional wealth-management services.
Emkay Wealth said India is witnessing a structural shift towards comprehensive wealth management, with investors increasingly seeking advice across mutual funds, equities, portfolio management services (PMS), alternative investment funds (AIFs), private credit, structured products, global assets, taxation, succession and estate planning.
The opportunity is no longer restricted to traditional private banking or investment-product distribution and is also widening beyond traditional high-net-worth clients. HNIs currently account for an estimated 62.8% of the market, making them the largest segment. However, demand is increasingly coming from mass-affluent, affluent, HNI, UHNI, family-office and institutional clients. This broadening client base is expected to create a much larger addressable market for wealth managers.
Parag Morey, CEO, Emkay Wealth Management, said, “India is at an inflection point where wealth creation is increasingly giving way to the need for professional wealth stewardship.
As financial assets become a larger part of household wealth, clients are looking beyond individual products and asking for a more integrated approach to accumulation, preservation and transmission."
The wealth manager of the future will need to combine investment expertise with technology, transparency and a deep understanding of the client’s family and long-term objectives.
"We believe this shift from product distribution to trusted advice will be one of the defining changes in India’s financial-services landscape,” Morey added.
Financialisation of household savings
The shift towards comprehensive wealth management is being supported by the growing financialisation of household savings, Emkay Wealth said.
Indian households are gradually moving savings away from physical assets and traditional bank deposits towards mutual funds, equities and professionally managed financial products. SIP-led investing is also bringing more investors into financial markets.
Mutual funds remain the largest-scale driver, with quarterly average industry AUM reaching approximately Rs 77.98 lakh crore in FY26.
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At the higher end of the market, investors are increasingly seeking customised investment solutions. PMS and alternative investments are gaining relevance, while AIFs, private credit, pre-IPO opportunities and structured products are being considered for diversification and differentiated returns.
Family offices are also expanding their role beyond investment management to areas such as governance, succession, philanthropy and intergenerational wealth transfer.
The wealth-management market is becoming more competitive. Banks continue to benefit from existing customer relationships, lending capabilities and large distribution networks. Independent wealth managers and RIAs are competing through customised advice, open product choices and greater fee transparency.
Digital and wealth-tech platforms are expanding access among mass-affluent investors through lower-cost products, automated portfolios and analytics. The emerging model is therefore increasingly “phygital”, combining digital onboarding and portfolio tools with human advice for more complex decisions.
Emkay Wealth expects competition to increasingly centre on trust, quality of advice, transparency, product access and the ability to address sophisticated financial needs.
Market conditions make asset allocation important
The investment environment is also strengthening the case for disciplined portfolio construction. India’s domestic economy remains resilient despite global pressures, supported by consumption, investment and services exports. Full-year GDP growth has been forecast at 6.70%, while Q1 growth stood at 7.80%.
However, geopolitical developments, energy prices, supply-chain pressures and weather-related uncertainty remain risks. Changing global interest-rate expectations also make asset allocation increasingly important.
In fixed income, Emkay Wealth is cautious on the longer end of the yield curve. With the domestic 10-year benchmark yield around 6.80%, the scope for a significant decline appears limited, while yields could move towards 7.10%. The preference is therefore shifting towards accrual and performing-credit strategies rather than taking large duration exposure.
Joseph Thomas, Head Of Research, Emkay Wealth Management, said, “The macro environment is becoming increasingly important for wealth creation because movements in global rates, crude prices, currency and inflation can have a direct impact on portfolio outcomes. For Indian investors, the objective should not simply be to predict the next rate cycle or market movement, but to construct portfolios that remain resilient across different scenarios. In fixed income, particularly, we see a stronger case for accrual-oriented and performing-credit strategies as investors balance the opportunity for returns with the risks associated with duration and rising yields.”
Precious metals are also becoming more relevant in diversified portfolios. At the time of the presentation, gold was around $4,328 and silver around $62.
Continued central-bank buying and diversification of reserves away from the US dollar are supporting demand. Emkay Wealth sees further upside potential for gold, while silver could face resistance at higher levels.
Small- and micro-caps could drive growth
India’s investment outlook remains constructive, with markets showing resilience despite geopolitical tensions, tariffs, elevated crude prices and inflation.
While markets have remained range-bound over the past two years, valuations across large- and mid-caps have become more reasonable, even as small- and micro-cap valuations remain elevated.
According to Emkay Wealth, the longer-term growth opportunity is increasingly emerging from sectors supported by localisation and indigenisation, including electronics, defence, aerospace, specialty chemicals, precision engineering and space technology.
Infrastructure spending, industrial demand and the financialisation of savings are also supporting India’s structural growth story.
“The structural story of India continues to remain strong, and while it continues to remain strong, the growth will be more, not in the large caps, or the top 250 companies, but in the small cap, micro cap, and even the SME segment. That’s where the action is going to be, that’s where the growth is going to be. At the same time, as a wealth manager, I shouldn’t also only be looking at the Indian market. So while I continue to remain bullish on India, I have to have a look at what’s happening across the world, ” said Ashish Ranawade, Chief Investment Officer at Emkay Wealth.
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Global diversification gains importance
Global diversification is gaining importance as markets such as Taiwan, Nasdaq 100, MSCI Emerging Markets, Japan and the S&P 500 have delivered strong returns over the past three years, Emkay Wealth said.
Rupee depreciation has further enhanced overseas returns for Indian investors in rupee terms, highlighting the role of global allocations in building diversified portfolios.
For HNIs and family offices, GIFT IFSC is also emerging as a platform to access global investment opportunities, with its regulatory and tax framework supporting overseas allocations through wealth managers, PMS, AIFs and family offices.
Emkay Wealth believes the evolution of India’s wealth-management industry will be shaped not only by rising financial assets but also by increasingly sophisticated investor needs, making asset allocation, diversification and long-term wealth preservation more important.
This article has been written by Kumar Gaurav, who is not a SEBI-registered Research Analyst or an Investment Adviser. Gaurav and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment.
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