Investing in Art-I, DNA

‘Buy one Atul or four Santoshes’

Friday, January 13, 2006 21:50 IST

INVESTING IN ART

Meenakshi Shedde flags off a series on art investment, decoding prices and trends.

Time was when agony aunts advised you what to do if you were in love with the Muslim boy next door and your parents disapproved. Today’s post-modern aunts spoon out advice on other, perhaps more pressing, practicalities. Sharan Apparao of Apparao Galleries publishes a newsletter for Citibank called Art Venture, and her advice to someone wanting to invest Rs 5 lakh in art runs thus: “Buy 2 Husain watercolours or 1 small Anjolie (Ela Menon) head on masonite and 4 drawings or 2 Arpita Singh watercolours…If you are looking at younger artists then buy one Atul Dodiya or a pair of large Jitish (Kallat) canvases...or a large Paresh Maity or four T V Santosh canvases.” Voila, you have the magic formula. More or less.

Estimates of the size of the Indian art market vary wildly; an Indian art fund manager puts it at 3,000 resident art investors investing over Rs 20 lakh a year. Apart from the galleries, there are two auction houses Saffronart (which claims it auctioned art worth Rs 80 crore in 2005) and Osian’s (whose spokesman claims it auctioned art worth about Rs 23 crore in 2005), the Yatra onshore art fund and other offshore art funds. An auction house director believes that the Indian and international demand for Indian art is nearly 50:50.

Art investment, fuelled by a booming economy and the NRIs’ updated nostalgia for contemporary Indian art, is speeding upwards like a missile (see graph). The question is, can the boom be sustained? Art collector Dilip De is buoyant: “The boom will continue. Just as the big drive behind European art were Non-Resident Europeans or Americans, it is the NRIs driving Indian art. Their buying strength in dollars and pounds is stronger, and it’s not black money.”

However, Minal Vazirani, director of Saffronart, the only online auction house in India, is somewhat cautious. “The price increase has been very steep and is bound to stabilise. Yet, the prices we gasped at a few years ago, seem normal today. Between the 1960s-2001, there’s been a compound annual growth rate of 20-23 per cent in art prices, accelerated by the entry of the big auction houses Christie’s, Sotheby’s and Bonham’s. The main reason for the boom is transparency in pricing. We publish prices of the works, as well as the price history of the artist.” Art collector Harsh Goenka is more cynical. “It’s an overheated market,” he says. “There is price rigging and black money in the art market. A correction is bound to take place.”

However, for the greedy hordes with an eye on investing in art, Vazirani has a word of advice: “The price depends on the artist, period, historical significance of the work, aesthetics, rarity, size, provenance, condition. If you say a Husain now costs X and extrapolate that two years later he will cost Y, it just doesn’t work that way.”

For newcomers, here’s a cautionary tale from De: “Insist on an authentication certificate from the artist. I buy from reputed galleries like Chemould or Pundole. And I befriend the artist, and get him to verify his painting. More importantly, when investing, it should be a painting to which you can rise every morning for the next 30 years. I still love my wife—it should be like that.”
(Part I of a series on investing in art)
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