Your choice should depend on how much money you can invest, your capacity to take risks and the holding period. The art market has declined 50% in the last few years. With another 20% drop predicted in the coming months, it might be a good idea to wait for a few months before you buy.
THE BLUE CHIPS
Works of the well-known artists. These artists are typically in their 50s and older, have already built a name and sold many works.
Investment size: Rs 50 lakh and above.
Holding period: At least 10 years Downside: Established names mean the premium has got factored into the price. Don’t expect big gains Prominent names: Atul Dodiya, Bharti Kher, T.V. Santhosh, Subodh Gupta, S.H. Raza and Ram Kumar
Bharti Kher
The skin speaks a language not it’s own, 2006
Winning bid: $ 1.7 million (Rs 11 crore at current exchange rate)
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S.H. Raza
Kundalini, 1996
Winning bid: Rs 1.2 crore
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Ram Kumar
Untitled (landscape), 1986
Winning bid: Rs 72 lakh
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T. V. Santhosh
A stone’s throw away, 2005
Winning bid: Rs 66 lakh
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THE MID-CAPS
Works of typically middle-of-career artists who have greater long-term exponential growth potential compared to senior artists.
Investment size: Rs 10-50 lakh approx
Holding period: At least 7-10 years
Downside: List of such works is long. You have to cherry pick. Not much data available in public domain
Prominent names: Jitish Kallat, G.R. Iranna, Arunkumar H.G., Jagannath Panda
G. R. Iranna
Sand castle, 2014
Winning bid: Rs 21.6 lakh
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Jagannath Panda
The entry in silence, 2008
Winning bid: Rs 18.76 lakh
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Jitish Kallat
Humiliation tax – I, 2004 – 05
Winning bid: Rs 18 lakh
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Arunkumar H.G.
Untitled
Winning bid: Rs 18 lakh
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THE PENNY STOCKS
The high-risk category. These artists are relatively unknown. Their valuation may soar as they appear in international galleries.
Investment size: Rs 5-10 lakh approx
Holding period: Atleast 5-7 years
Downside: Smaller works offer better liquidity but bigger works may not appreciate
Prominent names: Ved Prakash Gupta, Jyoti Basu, Baiju Parthan, Gigi Scaria, Dhruvi Acharya, A. Balasubramaniam
Baiju Parthan
Archeology-Kerala-1
Winning bid: Rs 9.6 lakh
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Dhruvi Acharya
The future is the past is the present, 2001
Winning bid: Rs 5.49 lakh
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Gigi Scaria
Untitled, 2013
Winning bid: Rs 5.16 lakh
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Mithu Sen
Untitled, 2008
Winning bid: rs 4.8 lakh
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TAXATION: If you sell a painting or sculpture after 3 years, you will pay longterm capital gains tax at 20% with indexation benefit.
INSURANCE: A significant recurring cost. These policies cover fine art, antiques and sculptures on an “agreed value” basis.
THE EXIT ROUTE: You should exit if the price of an artist or a particular work trends downward for two valuation cycles—over a 6-year period.