Indian art paints a new picture in downturn

MUMBAI (Reuters Life!) - An economic downturn has taken some colour out of India’s once booming art market, but it has also brought back collectors who had been priced out by speculators splashing out on high-priced works.

A visitor walks past a painting of modern and contemporary art during a three-day-long 'India Art Summit 2008' in New Delhi August 23, 2008. REUTERS/B Mathur

At two recent auctions of modern and contemporary Indian art, works were priced lower and not all of them were sold, but quality works by well-known artists still saw fierce bidding.

“We are very encouraged by the fact that despite the slowdown, people are still looking to buy quality work,” said Dinesh Vazirani, co-founder of Saffronart, whose spring online auction recently sold 70 percent of more than 100 works.

Prices are nearly 25 percent lower and the Saffronart auction netted 78 million rupees ($1.5 million), he said, just a fifth of the collection from the summer auction last June.

“But we are seeing old collectors who’d missed out during the boom, buying what they like, what they know,” he said.

A booming economy and a six-year bull market had helped fuel a boom in Indian art in recent years, with prices of even lesser-known artists skyrocketing as newly minted millionaires bought paintings and sculptures to match designer interiors.

Wealth managers began advising on art as an alternative investment, and dozens of galleries mushroomed in New Delhi and financial hub Mumbai, along with fancy wine and cheese soirees and waitlists for artists stretching into years.

“We had a lot of speculators who only wanted to buy art as a short-term investment, something they had to do to keep up,” said Vazirani.

Now, the focus is back on provenance, aesthetics and historic value, Vazirani said, terms hardly heard during the boom, and bidders were drawn to the “classic” old favourites such as Subodh Gupta, MF Husain, VS Gaitonde, SH Raza and Manjit Bawa.

That was the case also at Osian’s, whose auction of contemporary Indian art and crafts fetched more than 80 million rupees, slightly below the lower end of estimates, according to founder Neville Tuli.

Still, fierce bidding pushed prices of such artists as Nicolas Roerich, Akbar Padamsee and Rameshwar Broota over the 10 million-rupee mark, and about two-thirds of the works were sold.

“Top quality art has maintained its value for over 5,000 years. Art tends to hold its value far better than most other financial assets, especially in downturns,” Tuli said.

At the Strand Art Room in Mumbai, business is slow but buyers are discerning, said curator Rukshaan Krishna.

“These are collectors, art lovers, who are buying art because it appeals to them, not because it is an asset,” she said.

But the boom had a good side, too: it raised awareness and brought several lesser-known artists out of the woodwork.

“We had a number of new buyers at the auction, younger people who are interested and drawn by the lower prices,” Vazirani said.

“So we are seeing a whole new generation of collectors.”