Bangalore: India’s economic boom has fuelled demand for condos, cars and company stocks but some of the new wealth created in Asia’s third-biggest economy is finding its way into art.
Entrepreneurs and young professionals, the biggest beneficiaries of India’s financial prosperity, are buying works of art both to signal they have arrived in life and as a safe-haven investment, auctioneers and gallery owners say.
The trend was on show last week at a Bangalore sale to snap up works by modern Indian artists such as Maqbool Fida Husain, Jamini Roy, Vasudeo Gaitonde and FN Souza.
“The interest in art is part of the lifestyle change we are witnessing,” said Maher Dadha, 54, chairman of Bid and Hammer Auctioneers, who estimated the minimum value of the combined collection at Rs100 million.
“Wealth has percolated down and people are buying art just like they are buying penthouses,” he said.
The hammer went down on a 1971 Husain watercolour on paper, entitled Shiva, at Rs3.4 million, the top price paid at the auction. At the start of this decade, Husain’s works fetched less than Rs600,000.
Auctions of modern and contemporary Indian art have raised millions of dollars overseas in recent years, with Christie’s selling a Tyeb Mehta painting for $1.6 million in 2005.
“Now it’s an internal trend, where Indian art is getting recognition in India itself,” said Dadha, adding that India’s rich “don’t blink for a moment over cost.”
Economic growth running at an annual 9%, a stock market that rose a record 47% last year and surging salaries for finance and technology professionals have created a middle class clientele for art.
Collecting Indian art has been traditionally a pursuit of former maharajahs, industrial houses, overseas collectors and rich expatriates.
The local art market -- both gallery sales and auctions -- is worth between $400 and 450 million and expanding as prices jump, said Arun Vadehra, owner of Vadehra Art Gallery in New Delhi and a consultant to Christie’s.
Gallery sales have jumped from barely $2 million in 2000 to $150 million, said Vadehra.
“The art market is very hot,” said prominent Indian art critic Ella Datta. “The collector base is growing with lots of of people like doctors, lawyers and IT professionals who can afford art coming into the market,” she said.
According to Bid and Hammer, the most renowned Indian art currently delivers solid annual returns of 35%. “Eight years ago, I bought a Jaya Jhaveri for a small throwaway price and today it is worth at least Rs100,000,” said Bangalore entrepreneur Sudhir Udayakanth, 34. “Today art has become an investment,” he said.
In 2006, auction house Osian’s raised Rs1.02 billion for a fund dedicated to art, luring investors with the promise of converting the country’s cultural wealth into capital assets.
The fund was open to those capable of depositing at least Rs1 million for three years. Osian’s paid a dividend last year, becoming the world’s first art fund to share income with investors before the lock-in period ends.
Indians also have access to purchasing art online, with Internet auction sites such as Saffronart opening up. The online market is worth between $30 and 40 million a year, said Dinesh Vazirani, a co-founder of Mumbai-based Saffronart.