Thursday, June 7, 2007 : Indian art prices have risen sharply: Saffronart Gallery

Dinesh Vazirani, Director, Saffronart Gallery, said the mood at the art auction seems buoyant. They have seen a maturing of the market and there is a shift from investors to collectors, he added. There has been a sharp rise in prices over the last two-to-three years, he added.

Arun Vadehra, Director, Vadehra Art Gallery, said the Saffronart auction have the advantage of the domestic market.

Excerpts from CNBC-TV18�s exclusive interview with Dinesh Vazirani and Arun Vadehra

Q: Are you feeling a bit apprehensive or confident after how the Christie�s and Sotheby panned out this time?

Vazirani: We are confident. There has been a good start to the auction this morning. We see a more mature and educated market. Many discerning people are looking at specific lots, that they are interested in, but the mood seems quite buoyant.

Q: The global auction seems to have a bit of a sore sentiment back home because Christie�s and Sotheby were not great. Are you seeing any kind of tampering with the modern Indian masters market? Is there any reason to be a bit cautious now?

Vadehra: I don�t think so, although what you are saying may be partially correct. One auction going a bit soft does not mean anything as you have got the whole market, which is doing very well at the retail level.

The Saffron auction, which has started today, will do well because it has got the advantage of the domestic market, which Christie�s and Sotheby do not have. A lot of Indian buyers do not know that they can bid in Christie�s and Sotheby and can also officially import. However, the customs duty is at 15% as against a VAT of 12.5%.

One can easily buy from Christie�s and Sotheby, but sadly people do not participate as much as we would like them to do.

Q: How buoyant has the pricing been for the art market because a couple of other asset classes have been slowing down over the past few months?

Vazirani: What we have found is a shift in mindset over the last five-to-six years. People have become more educated and discerning. When we talk about a collector we mean someone who has spent some time learning. We see a shift from an investor to a collector and to be a good investor you have to have a good eye. First, someone should be a good collector. We see some kind of market maturity coming in. We have seen a sharp rise in prices over the last two-to-three years. The market is consolidating and getting more matured. A number of specific good quality works are doing very well. There is a lot of interest in those kinds of works.

Overall, the mood is good. The indicators for the art market as far as Indians are concerned is doing well, they are generating wealth. The interest in Indian art from both domestic and NRIs is growing. The general indicators are good. The buoyancy of the last couple of years will continue as the market grows and deepens.

Q: Is it just that interest levels are a bit low or this market is stronger within its domestic interiors?

Vadehra: If you take the Christie�s Hong Kong auction as well as its London auction, the Hong Kong auction witnessed sales of 75% of lots to non-Indians. In the London auction, which was predominantly dominated by models, we sold about 20% to non-Indians.

The interest among non-Indians is increasing and the buoyancy is going up. The client is becoming more discerning and good stocks are making good value. In one of the Bonhams auction, we saw Jamini Roy making about Rs 1 crore. In another auction, we saw Bikash Bhattacharya making nearly Rs 80-85 lakh.

We are rediscovering the market to that extent. I think Jamini Roy is a great example of the Bengal school, which may reopen after a period of four-five years.

The market is broadening, there is a great future for Indian art. Unlike the West, there is a lack of museum culture in India and that's why Indian buyers can still buy the top western art works, which are unavailable to the western collectors.

Q: Is the market getting far more selective and quality conscious right now as in some of the global auctions a whole lot of Souzas, Razas or Gaitondes did not actually sell?

Vazirani: The market is definitely making a distinction between good and poor quality works. That comes only when there is a shift or balance between the so-called financial and aesthetic side, where you have the investor/collector. The eye of the investor is trained to make good choices.

The so-called education where people have access to information, pricing, and transparency, which has happened over the last five-to-six years, has really helped people to be discerning and have a good eye to look at art. Today, people are actually choosing works where they believe the quality is good. That�s a good sign for the market.

Q: Christie�s Hong Kong auction did much better than Christie�s Modern Masters auction. Do you sense any kind of interest shift from the moneybags to contemporary Indian art rather than modern art as the kind of prices which Dodie fetched in the Hong Kong auction were quite eye popping when compared to the kind of performance with modern masters?

Vadehra: Modern masters have already gone up by six-to-seven times during the last two years and contemporary is little refreshing to see. They have been seen and bought by most collectors over the last seven-to-eight years. Contemporary is more affordable and you can get top works of a contemporary master today. Even international buyers participate a little more in contemporary art because it is (a) trendy (b) contemporary in the true sense and (c) reasonable to the pocket.

Q: Do you see any kind of shift happening in the market? Arun spoke about the possible reemergence of schools like the Bengal School, which has been suppressed for a long time. Are contemporary signals coming in from the recent Hong Kong auction or is it same the Souza-Raza kind of market?

Vazirani: The market today has got many streams and it mirrors the international market in many ways. Globally, contemporary art has been hitting record prices at auctions over the last year as the collector base is becoming younger and there is an interest in those works, which meet their contemporary identity. Other genre like the Bengal school, which was not in the limelight for long time, is coming back very strong and artists like Ganesh Pai, Bikash Bhattacharjee, and Jogen Choudhary are all doing extremely well at auctions. Different genres develop as the market and the size of the players grow. There are pockets all round the world focusing on the different areas of art.

Q: What is your own gut feeling. Is Tyeb going to be King again at your auction?

Vazirani: It is a fantastic work. I presume, there will be a lot of interest and there is a good chance he might be.

Q: Which one is your favourite at the auction this time?

Vazirani: I like quite a few. I like Terre Rouge, which is Raza's with its bold and vibrant colours. I also like Tyeb very much. There is a good selection of Arpita Singh's in this auction and a couple of small Souza paper works, which I personally like very much.

Q: What is your favourite work in this Saffron lot?

Vadehra: In addition to whatever Vazirani said, I like the Husain�s The Horses work quite a lot. Of course Tayeb�s work really stands out. I have had an opportunity to see his work in the flesh in Vazirani�s office. The same is with Raza�s work.

I think there are works for all kinds of collectors and for all kinds of pockets. I expect this auction to do well in spite of the fact that a lot of people are saying that contemporary is the flavour. I agree with that but these masters will remain masters.

Q: You were there at the Hong Kong auction. Is the investor-base increasing or expanding fast enough or does that remain a point of concern because people still complain that at the top-end of the market it is still quite narrow for the Indian art?

Vadehra: I read your article today, which said that there is 100 million demat accounts in China as against 10 million in India. Somehow or the other our art is better than China as our markets are better than China. I think this investor-base or the collector-base will go up by geometric progression and not arithmetic progression. This will certainly change in the next two or three years.

I do see the market going up to a billion dollars from today. USD 400 million will be a reality within the next two-years and thereafter it will reach the USD 2 billion mark by 2012. There is a bright future for the market.

Q: Some people back in India have been a bit worried on where prices are heading. Do you sense any softness in the art market right now, or are you saying that things are okay?

Vazirani: It seems all right. I can really answer that question tomorrow evening, after seeing the participation in the auction. But it seems like the interest levels are still high. The mood is still buoyant and people are excited as the quality of work is good and that makes a difference.

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