Art is hot in India

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » BSE | NSE 10/02/12

Art is the new investment destination and various art funds are cropping up in India. To discuss this new investment route is Guy Naggar, Chairman, Dawnay Day International.

Naggar says the art index has shown a growth of 60% to 70% over the last 12 months.

Excerpts from CNBC-TV18's exclusive interview with Guy Naggar:

How would you lay out the art investment market in India, its growth and current status?

The growth has been enormous over the last 10 years. As an art index, it shows that prices of art in India and contemporary artists have gone up 25 times.

Though it started from a very small base, the art index has shown maybe a growth of 60% to 70% over the last 12 months. It seems to have cooled down during the past three-four months.

The interesting thing about contemporary art in India is there is a lot of talent. You have had many talented contemporary artists and a lot of good painters in India for a very long time.

Now, it is coupled with the fact that the economy is growing at an enormous rate in India. It has a double effect because there is the product to buy and you not only have more and more Indian collectors but also international collectors like us who are buying Indian art.

As an investment house, you have been offered to become an art fund house as well. Are you seeing a lot of clients, high net worth individuals who would normally trust a fund manager with their money to be put into financials assets? Are you seeing that community asking that some of their money be put into art as an investment?

Yes. Until now, in India, we have only bought art for own collection, for our own offices. We bought a lot of art, over 200 paintings. We love art, not only as an investment, but very much because it improves the environment of an office. For us or our colleagues, it is more agreeable to have beautiful art on the walls.

Basically, we have only bought with our own money for the time being. But we have a number of our high net worth individual clients saying we would also like to invest in art.

We haven't got a fund yet, but we are very much looking at offering a product to our clients during the next few months.

You are looking to enter the advisory space as well. Could you give us a sense of how big this operation could be in terms of what sort of an investment you are looking at? Can you give us a sense of which artist you are actually pushing and what sort of an appetite you are seeing, from which corners for these artists in terms of their paintings?

Basically we are looking at the art sector in India in depth. So it goes from advising clients in the future on what artist to buy to maybe setting up an auction house in India.

If you have been following what has been happening over the last three weeks for instance, in London, the auction houses have sold something like three-quarter of a billion dollars or bit more of art in a few sessions.

More and more Europeans and Americans are looking at Indian artists. For our own collection, we have bought very well-known, talented artists.

The prices of paintings can vary from less than a lakh or few lakhs to Rs 2 crore to Rs 3 crore. And that is what is very exciting today -- to see that people are willing to buy Indian paintings for Rs 3 crore to Rs 4 crore, in the international market.