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: Mumbai: At a recent auction of artworks in Mumbai two modernist sculptures by international artists set the cash registers ringing. While Italian sculptor Amedeo Modigliani’s (Head of Caryatid) went for 10.59 crore, , a pink dog with green, red and black spots by Japanese artist Yayoi Kusama fetched 8.
82 crore. It shouldn’t come as a surprise that Indian investors are investing millions of dollars on such assets. India’s (with a net worth of at least 1,000 crore)—1,539 as per the 2024 Hurun India list—is no longer immune to the allure of rare collectibles.
In September last year, Mumbai-based auction house Saffronart sold Amrita Sher-Gil’s 1937 oil-on-canvas masterpiece for 61.8 crore, which remains a record price an Indian work of art. That same month, Pundole, another auction house in Mumbai, sold a Sayed Haider Raza painting titled for 51.
75 crore. India’s uber-wealthy are also splurging on antiques, rare coins and currencies, stamps, sports memorabilia, vintage cars, fine wine and whisky—these making for a significant asset class alongside equities. Also read | Over the past 5-7 years, Indian investors have been increasingly focusing on rare collectibles, said Dillon Bhatt, founder and chief executive of LuxForte, which specialises in luxury brands.
“This is definitely an emerging asset class and could be the next big one after equities," said Bhatt, a collector of rare luxury items who also advises his wealthy Indian clients on investing in such assets. While many collectors are motivated by passion, nostalgia, and the status symbols these collectibles represent, the allure of potential profit is also significant. Rare or limited-edition collectibles, in particular, can see substantial appreciation over time, turning them into attractive investment opportunities.
Take for instance the Cartier Crash, an iconic timepiece that’s adorned the wrists of American rappers Kanye West and Jay-Z and several other celebrities. The luxury watch’s price has soared from about $50,000 to $250,000 in just three years, said Bhatt, adding that a rare Japanese whisky has delivered gains of 200% in two years. Appreciating collectibles Nita Shivdasani, managing director at Waterfield Advisors, a wealth management and family office advisory, said rare collectibles are emerging as a prominent alternative asset class for affluent Indians.
She explained that the price of a Hermes Birkin bag typically doubles in 5 years—the most important factor of the price appreciation being the scarcity principle. Chanel bags have more than doubled in price since 2016, while some models of the Swiss luxury watch brand Rolex have seen significant price increases owing to their limited supply and high demand. The price tag of the Rolex Daytona, Shivdasani said, has appreciated considerably, fetching 2-4 times more than its original value.
Also read | Vivek Rathi, national director-research at property consultancy Knight Frank India, said the surge of wealth in India was fuelling a diversification trend, with the uber-wealthy seeking alternative investments beyond traditional asset classes such as real estate. “When it comes to specific luxury items, Indian UHNIs (ultra-high net worth individuals) exhibit a strong preference for coloured diamonds, art, and classic cars," said Rathi. “Additionally, luxury handbags and watches have gained significant traction as sought-after collectibles.
" He added that while such wealthy individuals globally typically allocate around 20% of their portfolios to luxury collectibles, Indian investors currently allocate about 17%. According to Shivdasani, considering the significant price appreciation of domestic stocks and gold over the past five years, an optimal allocation to luxury items or rare collectibles should be 5-10% of an individual’s total portfolio. Also read |.
