As Foreign Investment Slows, India’s Wealth Is Filling the Gap

0:00 In 2016, Rajat Mehta backed an early-stage,

0:03 online investment platform called Groww– a startup he

0:07 says was valued at just $1.3 million U.S.

0:09 dollars at the time.

0:11 Fast-forward to November 2025, when Groww made its market debut on India’s

0:15 stock exchange at a valuation of $8.6 billion.

0:19 For the 30-something heir to the Mumbai-based Mehta Group,

0:23 it wasn't just a winning bet.

0:25 It was a sign that India’s wealth is starting to move differently.

0:29 Historically, Indian families used to hold their wealth in gold or land assets,

0:34 and now this money is actually coming out and being

0:37 invested back into the economy through a lot of these startups.

0:40 The new age, the new generation is coming up with ideas,

0:43 and they just need somebody who can mentor them

0:45 and help them with better execution of those ideas.

0:48 The old age firms who have built over the last two and a half, three decades,

0:53 that family office has looked at investments who have started conservatively,

0:57 have now looked at being much more aggressive in the market.

1:00 This shift isn’t being driven by India’s legacy families alone.

1:04 It’s also being shaped by first-generation founders who

1:07 built their fortunes over the past three decades,

1:10 and a fast-growing “new rich class.”

1:12 It's about reallocating capital in the economy.

1:15 Now they are thinking about investing in financial assets and startups and tech

1:20 and biotech and other sectors that didn't even exist ten years ago.

1:25 To me, that's a structural change in the economy.

1:33 According to the 2025 Hurun Global Rich List,

1:40 India is home to 284 billionaires— up from 271

1:44 a year earlier— ranking third globally behind the U.S.

1:48 and China.

1:49 Within that growing pool of wealth, India is on the cusp of an unprecedented

1:54 intergenerational wealth transfer of $1.5 trillion dollars.

1:58 At the same time, India’s ultra-high-net-worth population is expanding rapidly.

2:03 These are families or individuals that have assets over $30 million.

2:08 This number has increased to 13,000 and is

2:12 estimated to grow to about 19,000 by 2028.

2:15 For generations, India’s biggest business

2:18 empires have followed a familiar pattern:

2:21 a founder builds the company, the family retains control,

2:24 and the next generation takes over.

2:26 If there's one family that defines India's wealth, it's the Ambanis.

2:30 Mukesh Ambani is Asia's richest man,

2:32 and his succession planning involves transferring the leadership of his $250

2:37 billion empire to his three children– Akash, Isha and Anand.

2:42 The Ambani family, has diversified from its oil and gas business into retail,

2:48 digital telecommunications and new-age energy.

2:51 Another example is the Adani business empire,

2:54 which has interest across ports, airports and energy.

2:57 Gautam Adani has already made plans to transfer the control

3:01 of his empire to the next generation by 2030.

3:04 But not every succession story is well planned or smooth.

3:07 Across Asia, succession is more fragile than in the West.

3:10 Much of today’s wealth was created quickly,

3:13 and many affluent families are still only in their first or second generation.

3:18 A 2025 study highlights the gap.

3:20 Among the 46 family-business founders surveyed,

3:23 91% said they intended for leadership to stay within the family.

3:28 Yet, 28% of founders cited a lack of interest from the next generation.

3:32 And even among the 72% who have identified a child as a potential successor,

3:38 24% said that successor is underprepared.

3:40 That matters because family-owned businesses still

3:43 account for about 79% of India’s GDP, one of the highest ratios globally.

3:48 The governance risk is there.

3:50 If the capital is misallocated or creates asset bubbles,

3:53 that's what we should worry about.

3:56 These kind of disputes are well known around the world,

3:59 where heirs take over the company.

4:02 They have different visions, different ideas.

4:04 I mean, these things have macro implications, if one of the heirs takes over,

4:08 and it doesn't really go the long way, because lots of investment is happening

4:13 of private and public capital in these companies,

4:16 so when they fail, they can actually create major disruptions for the economy.

4:20 Indian family offices are shifting from passive

4:23 income to hands on, private equity style investing.

4:27 And increasingly, next generation heirs are backing

4:30 startups that build on their family’s core industries.

4:33 When you invest in a business which is

4:35 more like an affiliate to your own business,

4:37 or is correlated to your own business, you know how the ecosystem works.

4:41 So whenever the understanding of business is high,

4:43 the money comes in at a very early stage of investment,

4:46 because your risk reward is potentially the highest.

4:48 You have a higher percentage of making that a success.

4:51 But India’s startup capital isn’t coming only from inheritance.

4:55 India opened its economy in 1991,

4:58 rolling back decades of state controls and protectionist policies.

5:01 The reforms helped trigger a wave of private enterprise and, over time,

5:06 the rise of a large cohort of self-made Indian billionaires.

5:09 Indian social fabric changed in the last two,

5:12 two and half decades– where that generation

5:15 became much more confident with access to information.

5:18 They went through the phase when India was on a growth phase.

5:22 They build something new.

5:24 Now, once they have built it,

5:26 they understand the nuances of the new age requirement.

5:29 Now they have built enough capital for themselves to not look at new ideation,

5:33 but to look at new ideas where they can support.

5:36 They can then help them with the kind of learnings that they have gone through,

5:41 help them reduce the kind of risk, or you can shorten the path to success.

5:45 Alongside them is a fast-growing “new rich” class:

5:48 startup employees who’ve minted wealth through

5:50 Employee Stock Ownership Plans (ESOPs)– stock options

5:53 that can become highly valuable when a startup goes public or is acquired.

5:57 The emergence of Flipkart was because there was a democratization of ESOPs.

6:01 This was a new age ESOP wealth creating firm which,

6:05 apart from its promoters, a large number of millionaires were created.

6:09 They believe that network can help the business grow.

6:11 New companies have emerged and have gone

6:13 on to become sizably large market cap firms.

6:17 In 2025, 12 startups executed ESOP buyback schemes,

6:21 providing more than $158 million in payouts to 9,265 employees.

6:28 So, how is all this wealth– old and new– actually being managed?

6:32 In just six years, the number of family offices in India has

6:36 jumped from 45 to 300– together overseeing about $30 billion in assets.

6:42 Many Indian family offices now allocate over 10% of their portfolios

6:46 to private equity and venture capital– with some exceeding 20%.

6:50 Now it is much more structured, well thought out, well planned.

6:54 The policies are well defined.

6:56 It is just not money being kept aside for investment.

6:59 The governance is playing a significant role,

7:01 and it is acting as a risk mitigator.

7:03 There is an absolute clarity of approach,

7:05 which segment that they want to go under,

7:08 what percentage of allocation has been made for that specific sector.

7:11 How much is going to listed, how much is going to debt,

7:13 how much is going to the unlisted space, early stage, the mid-stage, pre-IPO.

7:18 But this generation isn’t just trying to preserve wealth.

7:21 They’re trying to grow it.

7:23 After a funding boom in 2021 and 2022, global investors pulled back.

7:28 Startup funding in India fell sharply– from $25.7 billion in 2022,

7:33 to $9.6 billion in 2023 amid higher interest rates and weaker public markets.

7:39 After the boom cooled, Indian startups had to look closer to home.

7:42 And by then, a new pool of domestic capital was ready to step in.

7:46 Back in 2024 quick commerce startup Zepto19, wanted to raise about $300 million

7:52 but after an overwhelming response from family offices,

7:55 it ended up raising 350 million in four weeks.

7:59 This round was largely led by Indian family offices,

8:03 which were managed by Motilal Oswal,

8:05 which is a private wealth management firm in India,

8:09 and other individual family offices like that of Rajat Mehta.

8:12 In the startup also, they know that there is a risk, right?

8:16 They also understand that if they make ten investments,

8:19 there are chances that one or two can go through difficult times,

8:22 but can their better ones cover up for that, this downside?

8:26 The key is, how do you create your allocation?

8:29 India’s startup boom was once driven largely by foreign capital.

8:33 Today, more of that money is coming from within.

8:37 Capital that once sat in gold vaults

8:39 and family estates is now flowing into technology,

8:42 renewable energy, healthcare and infrastructure.

8:45 If we create more domestic capital that is invested,

8:49 it means you're relying less on foreign capital,

8:52 which means you can invest for longer periods and take more risk as a company,

8:58 because your cost of capital is lower.

9:00 Interest rates are typically high, but if the money is domestically generated,

9:04 then the volatility is low for the banks,

9:07 so they provide it at a lower interest rate and so

9:11 their ability to generate revenue or generate profits on their ideas, higher.

9:15 That allows you to take extra risk, allows you to experiment slightly more

9:20 and then successfully take the company public,

9:23 create unicorns, take companies to IPO and essentially

9:26 benefit the entire ecosystem and the macro economy.

9:29 The question is whether this capital can build resilient businesses,

9:33 deeper markets and long-term growth,

9:34 or will it just fuel the next cycle of risk?

9:37 If not managed well, it could destabilize markets,

9:42 and the consequences won't just stay contained within India.