As Foreign Investment Slows Indias Wealth Is Filling The Gap

TITLE: As Foreign Investment Slows, India’s Wealth Is Filling the Gap CHANNEL: CNBC International DATE: 2026-04-15 ---TRANSCRIPT--- In 2016, Rajat Mehta backed an early-stage,  online investment platform called Groww – a   startup he says was valued at just  $1.3 million U.S. dollars at the time. Fast-forward to November 2025,  when Groww made its market debut   on India’s stock exchange at  a valuation of $8.6 billion. For the 30-something heir to  the Mumbai-based Mehta Group,   it wasn’t just a winning bet. It was a sign that  India’s wealth is starting to move differently.   Historically, Indian families used to hold their  wealth in gold or land assets, and now this money   is actually coming out and being invested back  into the economy through a lot of these startups. The new age, the new generation is coming up with  ideas, and they just need somebody who can mentor   them and help them with better execution of  those ideas. The old age firms who have built   over the last two and a half, three decades,  that family office has looked at investments   who have started conservatively, have now looked  at being much more aggressive in the market.
  This shift isn’t being driven by India’s  legacy families alone. It’s also being   shaped by first-generation founders who built  their fortunes over the past three decades,   and a fast-growing “new rich class.”

It’s about reallocating capital in the   economy. Now they are thinking about  investing in financial assets and   startups and tech and biotech and other sectors  that didn’t even exist ten years ago. To me,   that’s a structural change in the economy.

According to the 2025 Hurun Global Rich List,   India is home to 284 billionaires —  up from 271 a year earlier — ranking   third globally behind the U.S. and China.

Within that growing pool of wealth, India is on   the cusp of an unprecedented intergenerational  wealth transfer of $1.5 trillion dollars. At the same time, India’s ultra-high-net-worth  population is expanding rapidly. These are   families or individuals that  have assets over $30 million.   This number has increased to 13,000 and is  estimated to grow to about 19,000 by 2028. For generations, India’s biggest business  empires have followed a familiar pattern:   a founder builds the company, the family retains  control, and the next generation takes over.   If there’s one family that defines India’s  wealth, it’s the Ambanis. Mukesh Ambani is   Asia’s richest man, and his succession planning  involves transferring the leadership of his $250   billion empire to his three children – Akash,  Isha and Anand. The Ambani family, has diversified   from its oil and gas business into retail,  digital telecommunications and new-age energy. Another example is the Adani business  empire, which has interest across ports,   airports and energy. Gautam Adani  has already made plans to transfer   the control of his empire to  the next generation by 2030. But not every succession story  is well planned or smooth.   Across Asia, succession is more fragile than  in the West. Much of today’s wealth was created   quickly, and many affluent families are still  only in their first or second generation.   A 2025 study highlights the gap. Among the 46 family-business founders surveyed,   91% said they intended for leadership to stay  within the family. Yet, 28% of founders cited   a lack of interest from the next generation.  And even among the 72% who have identified   a child as a potential successor, 24%  said that successor is underprepared. That matters because family-owned businesses  still account for about 79% of India’s GDP,   one of the highest ratios globally.

The governance risk is there. If the capital   is misallocated or creates asset bubbles, that’s  what we should worry about. These kind of disputes   are well known around the world, where heirs take  over the company. They have different visions,   different ideas. I mean, these things have macro  implications, if one of the heirs takes over,   and it doesn’t really go the long way, because  lots of investment is happening of private and   public capital in these companies, so when  they fail, they can actually create major   disruptions for the economy.

Indian family offices are shifting   from passive income to hands on, private  equity style investing. And increasingly,   next generation heirs are backing startups  that build on their family’s core industries.   When you invest in a business which is more  like an affiliate to your own business,   or is correlated to your own business,  you know how the ecosystem works. So whenever the understanding of business  is high, the money comes in at a very   early stage of investment, because your  risk reward is potentially the highest. You have a higher percentage  of making that a success. But India’s startup capital isn’t  coming only from inheritance. India opened its economy in 1991, rolling back  decades of state controls and protectionist   policies. The reforms helped trigger a wave of  private enterprise and, over time, the rise of   a large cohort of self-made Indian billionaires.

Indian social fabric changed in the last two, two   and half decades – where that generation became  much more confident with access to information.   They went through the phase when India was on  a growth phase. They build something new. Now,   once they have built it, they understand  the nuances of the new age requirement. Now they have built enough capital for themselves  to not look at new ideation, but to look at new   ideas where they can support. They can then  help them with the kind of learnings that they   have gone through, help them reduce the kind of  risk, or you can shorten the path to success.   Alongside them is a fast-growing “new rich”  class: startup employees who’ve minted wealth   through Employee Stock Ownership Plans (ESOPs)  – stock options that can become highly valuable   when a startup goes public or is acquired.

The emergence of Flipkart was because there   was a democratization of ESOPs. This was  a new age ESOP wealth creating firm which,   apart from its promoters, a large  number of millionaires were created. They believe that network can help the business  grow. New companies have emerged and have gone on   to become sizably large market cap firms.

In 2025, 12 startups executed ESOP buyback   schemes, providing more than $158  million in payouts to 9,265 employees.   So, how is all this wealth – old  and new – actually being managed? In just six years, the number of family offices in   India has jumped from 45 to 300 – together  overseeing about $30 billion in assets. Many Indian family offices now allocate over  10% of their portfolios to private equity   and venture capital – with some exceeding 20%.

Now it is much more structured, well thought out,   well planned. The policies are well defined. It  is just not money being kept aside for investment.   The governance is playing a significant role,  and it is acting as a risk mitigator. There is   an absolute clarity of approach, which segment  that they want to go under, what percentage of   allocation has been made for that specific sector.  How much is going to listed, how much is going   to debt, how much is going to the unlisted  space, early stage, the mid-stage, pre-IPO.   But this generation isn’t just trying to  preserve wealth. They’re trying to grow it. After a funding boom in 2021 and 2022,  global investors pulled back. Startup   funding in India fell sharply  – from $25.7 billion in 2022,   to $9.6 billion in 2023 amid higher  interest rates and weaker public markets. After the boom cooled, Indian startups  had to look closer to home. And by then,   a new pool of domestic capital  was ready to step in.   Back in 2024 quick commerce startup Zepto19,  wanted to raise about $300 million but after   an overwhelming response from family offices,  it ended up raising 350 million in four weeks. This round was largely led by Indian family  offices, which were managed by Motilal Oswal,   which is a private wealth management  firm in India, and other individual   family offices like that of Rajat Mehta.

In the startup also, they know that there is   a risk, right? They also understand  that if they make ten investments,   there are chances that one or two  can go through difficult times,   but can their better ones cover up  for that, this downside? The key is,   how do you create your allocation?

India’s startup boom was once driven   largely by foreign capital. Today, more  of that money is coming from within. Capital that once sat in gold vaults and  family estates is now flowing into technology,   renewable energy, healthcare and infrastructure.

If we create more domestic capital that is   invested, it means you’re relying less on foreign  capital, which means you can invest for longer   periods and take more risk as a company, because  your cost of capital is lower. Interest rates are   typically high, but if the money is domestically  generated, then the volatility is low for the   banks, so they provide it at a lower interest  rate and so their ability to generate revenue   or generate profits on their ideas, higher. That  allows you to take extra risk, allows you to   experiment slightly more and then successfully  take the company public, create unicorns,   take companies to IPO and essentially benefit  the entire ecosystem and the macro economy.   The question is whether this capital can  build resilient businesses, deeper markets   and long-term growth, or will it just fuel  the next cycle of risk? If not managed well,   it could destabilize markets, and the consequences  won’t just stay contained within India.