India was among the fastest growing countries in the world in terms of HNIs.
The super-rich club in India is becoming bigger, with 9,000 new members joining it in 2004. The number of wealthy individuals went up to 70,000 from 61,000 in the previous year.
A Merrill Lynch/Capgemini World Wealth report also found there were now 8.3 million rich individuals across the world who had $1million of spare cash to invest, excluding the value of their homes and pensions.
India was among the fastest growing countries in the world in terms of high net worth individuals, Raj Sehgal, global private clients country head for India and global NRI market manager, DSP Merrill Lynch, said.
The strong growth in gross domestic product (GDP), a low interest rate environment and a sharp upward rally in the stock market during the second half of the year were the key triggers for the rise in the number of wealthy individuals, Sehgal said.
Despite the stock market slump in mid-2004, the rich were able to recoup their investments as the capital market recorded a sharp revival later, he said.
Commenting on the changes in the investments made by the super-rich, Amitava Neogi, chief administrative officer (global private client), DSP Merrill Lynch, said they were increasingly looking at "investments of passion", including fine art and collectables as well as real estate.
Agencies add: Richard Turnill, chief investment officer of discretionary business at Merrill Lynch, said wealthy investors all over the world ploughed more of their money into private equity last year and were investing less in hedge funds and real estate.
He said: "Hedge fund investing among high net worth individuals has slowed since 2003 as returns have declined from 17.2 per cent in 2003 to 7.5 per cent in 2004."
According to the report, equities continue to represent the highest proportion of assets owned by wealthy individuals. Typically, they make up 35 per cent of a rich individual's investment portfolio.
However, the amount of money invested in private equity rose last year from 13 per cent to about 14 per cent of a typical portfolio. The amounts invested in real estate fell from 17 per cent to 13 per cent.