He Saffronart winter online auction augurs well for the future of our contemporary art. Not only did it figure 160 lots, 147 of which sold, netting a total of Rs 66.3 crore ($15.3 million), but our blue chip artists who dominated the sales, give us a good idea of the rate of appreciation of our best art.
For this analysis, I am choosing three artists of the Mumbai group. They are M F Husain, S H Raza and F N Souza. The reason is obvious. Artists of the Mumbai group are probably the best investment in the art market today, so once we have a clear picture of it, we know what art investment returns are like in concrete terms.
M F Husain is perhaps the best artist to study investment through. And it is interesting that in a period of three years, two of his works came up for resale at the same auction house. This shows how Husain’s work is treated like currency and it circulates.
One of these works was a water-colour on paper, Gandhi, (lot 8) in the 2004 winter online auction that sold well above the expected price, for Rs 17,41,500($38,700). This year it came up for sale again, as lot 27 and sold for Rs 39,09,345 ($90,915). Another work, a cobalt blue study of a horse (lot 13) came up for sale in the same auction and sold above the expected price at Rs 38,70,000 ($86,000). This year it came up for sale again as lot 136, selling at Rs 93,89,050($ 2,18,350). So, we can see that in two years the prices have doubled.
This does not happen for Souza and Raza, who are bought much less by investors, and more by collectors who do not offload their works so fast. Also, artists other than Husain are generally not easy to sell in a moment, so their works often do not return to auctions as Husain’s do. But the price rise is of a similar nature. In 2004, the highest price paid for a geometric canvas of S H Raza (lot 26) was Rs 63,96,250 ($ 1,42,139) for a work that was 121.9 cmX121.9 cm. In 2005, the highest price paid for a work of his (lot 27), which was 151X151cm, was Rs 1,28,26,000 ($291,500). This year, his highest priced work was lot 84, an acrylic on canvas that sold for Rs 6,03,07,500 ($14,02,500), whose size was 177.8 cmX 152.4 cm. In two years, the price of Raza’s work has risen eight times at least. But then, the works sold are not the same and reflect the collector’s price, which depends on factors other than investment.
Leaving aside some cases, doubling or tripling one’s investment in a year is very much a possibility for the average investor, especially when the stockmarket is undergoing correction.
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