Blue-chip art


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WHEN I began this journey over 25 years ago as a pig-tailed school girl with an impulsive purchase of three morbid Altafs at Jehangir Art Gallery, little did I realize where I was headed. All I knew then, and luckily for me this has not changed, is that I am completely fascinated by everything aesthetic and creative. I can appreciate that which is artistic in most forms, but it is painting to which I am most passionately attached.

I don’t know when I made the transition from a buyer to a collector and investor. It just happened. What has not changed is that I enjoy engaging with artists and other members of the community. The language of art, written and painted, fascinates me. I thrive on being surrounded by objects of beauty. I am proud to be a patron no different from the maharajas of days bygone! I love the chase and then the pride of ownership. I dream of leaving a legacy, a testimony to my taste and vision.

Actually now that I think about it, I prefer to label myself as a collector first and foremost. It is because ticket sizes have gone up so significantly, as also the market value of the buys over time, that what started out as a passionate hobby has now entered into the universe of investable surpluses. It is the confidence that I now have, actually both my investment banker husband and I have, that helps me take the plunge each time. It comes with a little knowledge, perspective and the training of the eye over many years. I strongly recommend the art fund route to the uninitiated buyer for larger outlays. I confess I too have invested in an art fund while I continue to buy individual works aggressively.

There is a lot of debate on the morality, efficacy and relevance of art funds and their increasing popularity in India. I do not buy into the naysayers lot on account of ‘it is unhealthy commercialization’, as this is a market that needs strong players in the absence of institutional participants. History has confirmed that for many reasons art has emerged as a store of value for culture, knowledge and aesthetics. Artistic output, while seldom initiated with some future monetary bonanza in mind, has over the years resulted in creating genres of collectibles to the extent that it has evolved today as a legitimate alternate investment asset class. It is its unique nature in that no two artworks are fungible that makes art a difficult, not questionable, investment decision.


As a part of investment planning, just as one is free to stock-pick or buy a mutual fund or appoint an investment advisor or portfolio manager or engage in a combination of the above, so it is with investing in art. The same caveats apply. Integrity, knowledge, experience, track-record and risk appetite are key parameters. Investment strategies here too can be formulated using value vs growth models. For the technical minded indices such as the ET Osian’s Art Index and SIR or square inch rate data too are available. One goes in fully cognizant of the fact that art represents that part of the folio where liquidity via a quick exit is not mandatory. Gains take time to be monetized for while the portfolio can be ‘marked to market’ periodically, sales take time to be realized.

One could in theory create a diversified portfolio or a specialist folio with a focus on old masters, Progressives, Bengal School, Cholamandal, the Bombay Boys, the mid-career stars and so on. However, creating the quintessential blue-chip portfolio is a nigh impossibility, since sadly all Husain’s were not created equal unlike Infy shares.

For the intrepid investor who would actually like to enjoy the adventure and relish living with the work instead of delegating the investment to a monthly NAV report, I have the following to share.


What does one look out for when buying art? Most important, buy what you like. You should feel something: beauty, horror, mystery, serenity. Something. Anything that engages either your mind or heart or soul. Each work has a different quality. Sometimes the artist is making a social comment, sometimes he is exploring an inner spiritual place, sometimes he is just being plain clever and experimental with media or technology. Sometimes his vocabulary is so rich he speaks for you. Often I buy a work for the same reason I have rejected another. At least I cannot pinpoint why a work appeals to me; it just does. This is not rocket science; it is about mood, feeling, connection.

Your mantra should be See See See before you Buy Buy Buy. Train your eye. It will build your confidence and help you acquire more expensive works. Always buy the best ‘quality’ art you can afford. Should one buy work of an artist in his signature style or an experiment or an unusual or rare specimen? This is a very tough call because there is no way to predict the future value of a work as it depends on what the market demand may be at the specific time of sale. Explore mediums other than traditional oil on canvas, especially water colours for their great luminosity, spontaneity and transparency. Don’t disregard them as the market unfortunately has. There is abundant aesthetic and financial value to be found in tribal art, miniatures, sculptures and multi/new media. If you are a focused type, pick a theme that can adds discipline to the process.

Having indulged in the art-speak above, there is a nuts and bolts checklist.

1. Condition: While condition reports are forthcoming from galleries and auction houses, one needs to scrutinise private sale works to ensure that the works will stand the test of time. Especially with watercolours and photographs, given varying quality of archival paper and digital reproductions, one needs to be vigilant. Adequate and competent restoration is a huge lacuna in India.

2. Documentation/provenance/exhibition history has become hugely relevant to establishing importance and authenticity at a later date, especially since so little is written on art. Cheque payments are vital not only for obvious reasons but because they serve as a vital record for future due diligence exercises.

3. Dealers: Their track record, pedigree and integrity are vital. Befriend and be guided and advised by a trusted network. Strong dealer support is also important for an artist’s career and artistic progression. Buying a beautiful nostalgic sunset from a pavement gallery isn’t going to fund Babloo’s Harvard degree.

4. Values: Comparison shop or accept that the market is the best judge of price. You judge value to you. Keep your eyes and ears open for unhealthy practices, including artificial price manipulation.

5.Framing is the last mile. Most buyers are penny wise and pound foolish when it comes to spending Rs 20,000 on a work with a Rs 15 lakh tag. An appropriate frame complements a work, often making the difference between a good and a great viewing experience. In terms of conservation and longevity, I cannot even begin to say how important archival quality framing is.

6. Insurance: For the first time we have a number of local insurance firms willing to provide protection. I recommend shopping around as the coverage and premia vary. Unfortunately it is early days yet, so one has not had much experience with the claim settling history. For the moment collectors are at least sleeping well at night.

7. Tax Issues: There are several that one must be aware of. While painfully expensive (jewellery attracts only 1%!), at 12.5% VAT is something that all participants including individuals would be wise to respect. Getting a VAT number now is fairly simple and lets you offset payments made so that takes some of the sting out of it. In the past for individuals there was no capital gains if you could establish it was a ‘personal effect’. As per this year’s budget a long term capital gains tax (22.66%) is payable with indexation benefits available. As always better to get individual advice from a tax advisor before proceeding. Buying at international auctions, while legally permitted, especially since remittances upto $100,000 (which will buy you an attractive postage stamp size Souza) are feasible, is still fraught with pain. The pain of shipping, insuring, importing, import duties and clearing can be a nightmare especially if one were to do it by the book.

8. Cost Issues: As an investment before you have even said Jack Dodiya you can be out-of-pocket 60% before you can even think about breaking even by flipping. Transaction costs are exorbitant. Dealer commissions range between 10 and 33%, auction buyers premiums are typically 20%, add tax on average 12.5%. To that add transport, shipping, storage and insurance required to maintain the work, and don’t forget about restoration and clean-up costs.


The Great Contemporary Indian Art Boom: FAQs often are – where are values headed? Is this boom sustainable? Just like nobody crucifies the great pundits on TV for their gurugyan I get the same leeway. It is not a bubble. It is perceived by some as such because the media has only now over the last three years picked up on it, and continues to cover it on a selective sensationalist basis. The fact is the overall values have risen steadily over the last ten years. The market has grown exponentially in depth in terms of number of buyers, sellers, artists, number of works, number of intermediaries – including dealers, galleries, art fairs, biennales, auction houses and classes of collectibles.

Yes, some practices are unhealthy and unnecessary. Pricing is a huge issue because not only are works overpriced and mispriced, there are multiple prices floating around for similar offerings . Price scepticism is a result. Gallery and dealer, even auction house practices, related to warehousing and market making, have made the buying public more aggressive about questioning quoted prices, accepting them less at face value. Especially among the newer and less established galleries there is often a huge disconnect between a listed value and a transaction price.


Still, people are slowly understanding the difference between pricing at a solo show vs auctions vs secondary private sales. Transparency continues to be at a huge premium. While auction prices can be sourced fairly easily, others less so. This is where establishing strong long-term relationships with galleries is vital.

I am always loath to use too much market terminology in equating the art and financial markets. Having said that, I see sustained demand as a key determinant. Wealthy diaspora, international institutions and collectors looking to include Asian and Indian contemporary to their existing collections, the huge interest in India per se, the coolness factor of being associated with art will be huge drivers.

On the supply side, the availability from the seniors and those that have passed on is limited. Plus you will also see a return to sanity by the middle rung, the mid-career artists and youngsters who will realize the pitfalls of prolific shoddy work. Still, as values become known and more transparent, new sellers will emerge looking to monetize heirlooms. In any rising market there will be performers and laggards.


We now annually have at least 22 international auctions virtually dedicated to contemporary Indian art sales worldwide in addition to any number of charity auctions, some of whom actually have works that may well be investment grade. The competition has ensured that participation is possible in many ways: in person, in absentia, on-line as also more recently on-line live via a live feed into the auction hall. In addition we are now seeing increased Indian participation in the established art fairs of Basel, Miami, New York etc., as also the newer ones such as Dubai and Shanghai. In fact the footfall in the Indian and Asian booths this year in Dubai was in stark contrast to the skeletal response to the international galleries. While I would not read a great amount into that, it is a healthy sign for sure. Indian participation in the Venice Biennale and in Documenta in Germany this year too are attracting attention. As the international art fair virus spreads to Singapore, Sydney and Istanbul, perhaps we can look forward to catching it in India in the future.

Lots of new collectors who fired up the markets and have already built core holdings, will add less aggressively. The liquidity overhang that we saw in India and overseas is clearly drying up with interest rates on the rise. The long-term repurcusions in the aftermath of the sub prime crisis too will be felt in different arenas. Investors and punters will consider opportunity cost of alternative asset classes in which to park excess liquidity. Till new collectors, including institutional buyers, step in to fill the void we may see the curve flatten or dip. While we already see the new interest trickling in, the valuations are rich. As they quickly climb up the learning curve and increase familiarity with the huge spectrum that comprises Contemporary Indian there may still be a time lag.

Over the last summer and spring sales one has witnessed increased volatility as well. There is a school of thought that says this is the best time for high quality art to reveal its true stable core nature and its ability to hold onto its value when all others are losing out.


You will continue to see new records set for superior or rare works. You will continue to see young artists achieve critical and financial success early in their careers. You will see artists like stocks being periodically re-rated. You will see sharp spikes, consolidation at different levels and steady rises. Never ever lose sight of the fact that unlike shares or commodities, artworks by the same artists are not fungible. The very nature of art makes it impossible to apply objective valuation norms successfully each time. There is so much subjectivity involved. Net net I think we are at the tip of the iceberg.

I think the key to investment success lies in realistic expectations and awareness. The rider on mutual fund prospectuses, ‘past performance is no indicator of future performance’, holds good here too. Poor liquidity, huge spreads, difficult exits (though now improving with so many dedicated auctions and more institutional players such as the art funds), inadequate insurance, infrastructure for storage, poor documentation, a lack of academic and critical support, etc. are characteristic of this nascent market. There is a strong risk reward profile. Chances are that the most difficult works to buy/stomach are those that will appreciate significantly more than chasing mediocre works with signatures. Over the last year one has already seen auction results rewarding quality and penalizing mediocrity.

Having said that, I am optimistic that given the awareness of all the participants, healthy changes will occur. This will result in strengthening the market place to sustain the increase in values.


Where is the Indian art scene headed? Happily I see it headed in many different directions. This does not confuse me. It excites me. Spiritual abstract, photorealism/photo reference, installation. New media new technology – that which is completely in tune with contemporary international art practice and global trends or reflects content that which is uniquely Indian. Whatever.

Frankly I don’t care if it is rooted in history, or tradition, or takes its inspiration from today’s times. These are exciting times we live in. We have seen more change, more patronage, more wealth creation in the decade gone by than ever before. I just want to see work that is well executed, well rendered, reflecting passion and insight. Originality in art is crucial if we are to battle mass branding that characterizes the lives we lead.

I am confident that despite the pressures of huge demand, ‘good artists’ will continue to produce ‘good art’. There may be moments of weakness and temptation where weak works may abound but the trend-line is clear. The world is about to see great contemporary art of limitless spectrum not just blue-chip emerge from one of the great creative civilizations.