Auction Picks V: Bottoms up

All else being equal, the proportion of lots unsold at auctions is inversely related to the market growth rate so it is not surprising to see, as in the accompanying graph that the percentage of lots unsold has steady declined from over 30% in 2003 to below 10% in 2006. There can only be two reasons for this. Either the quality of lots is going up or the buyers are becoming less discerning. I suspect it’s a little bit of both.


Now, it is only reasonable to expect a small proportion of painting to be of passable quality and this gigantic sale is no exception. On last count I encountered about 30 duds that managed to find its way into the auction catalogues, which is really not too many considering there are over 600 lots on offer.

So what qualifies as a dud? Now that a million dollar question for which there is no one right answer. It is ultimately a matter of taste and personal assessment of the price-value-quality equation of a given picture, its relative weightage against the artist known body of work and to a lesser degree against the artists peer group. The price, provenance, condition are all additional factors that aid in the decision making – and finally, it all happens at the blink of an eye

With that here is my top 5 or should I say bottom 5 lots that


FN SOUZA (lo. 40, Bonhams)
1958. Portrait of a Man

Est. $228,000~ 285,000

Souza rarely went wrong in the 50's but this is one is a disaster.




TYEB MEHTA (lo. 56, Sothebys)
Seated Figure
$250,000~$350,000

This series of works simply fail to excite or inspire yet there are deep pocketed buyers who will pay top dollars for them!



FN SOUZA (lo. 54, Sothebys)
1961, Untitled


Technically not a terrible work but tepid scenery not worth spending looking at. There are many better candidates in the $200,000~$300,000 price bracket so hang on to your paddles


N.S. BENDRE (lo. 5, Osians)
Flower

Est. $80,000~ $100,000







An uncharacteristic picture by the late master that looks more like an overexposed photograph of flowers in a field.



B. PRABHA (lo. 30, Bonhams)
Waiting

Est. $38,000~57,000

This picture is simply too green, looks too fresh and almost too amateurish...did I mention green!

Auction picks IV: Top 5 under $100,000

Even little pictures cost a princely sum these days however, there is something for everyone in this mega sale. Those looking to simply get their wet their feet have ample opportunity to go home with a prize find for not too much money and there is more good news. With nearly 500 lots (80% of total) in this segment, buyers can afford to be picky.

Given the sheer numbers of lots in this segment, generating a top 5 list is almost not fair as the options are mind boggling. However, I will stick my neck out once again with five that should not be overlooked.


V.S. GAITONDE (lo. 41 Christies)
1962, Untitled



This ink on paper work is a classic with eternal appeal and has Gaitonde’s signature style written all over it. Estimated at $50,000~70,000 it should sell well for $125,000
















JOGEN CHOWDHURY (lo.119 Sothebys)
1974, Seated Man
Est. $15,000~$20,000

This picture has all the vital ingredients to give it great drama and appeal. A dash of cross hatching, the bold red background and the period on the painting all make this a must have for die hard Jogen fans. I can already hear someone calling out $75,000 for this little gem


S.H. RAZA (lo. 35 Bonhams)
1956, Yellow Landscape




Estimated at $57,000~$95,000 this work from the 1956 will brighten up a room of any size. I love the use of the bright yellow and big bold black lines for form and perspective. I would not be surprised if this came close to the $200,000 mark




ARPITA SINGH (lo. 149 Christies)
2002, Untitled

Est. $25,000~$35,000





Probably the most important woman artist after Amrita Sher-Gil, her works are impossible to find outside the auction market and this little jewel is precious even at $50,000


SHANTI DAVE (lo. 32 Osians)
1954, Untitled

Est. $22,000~$28,000
Shanti Dave is an unsung hero yet to be discovered by the market. He won three national awards in the 50’s and his works from this period are rare to find. A great buy up to $60,000 for those looking beyond the usual suspects.

Auction picks III: Top 5 under $250,000

The mid-tier segment of the modern sale is very exciting with plenty of first rate pictures on offer particularly from Christies and Sothebys. The suite of Raza’s and Ram Kumar’s are worth calling out as mostly all of the works on offer are of high quality and one could very easily have a list of top 5 comprising of either of their works given the large pool of outstanding pictures to choose from. However, in the interest of diversity lets take a look at closer look at the five that made the cut





S.H. RAZA (lo 79 Sotheby’s)
1971, La Nuit




Estimated at $120,000~180,000 a work of this quality and period by the master colorist should easily fetch close to $300,000
















JAGDISH SWAMINATHAN (lo. 84 Sotheby’s)
1972, Perception

This picture estimated at $150,000~$200,000 is one of my favorite swami’s in this sale, I would not be surprised if likeminded buyers bid this up to $450,000


F.N. SOUZA (lo. 37 Bonhams)
1961, Still Life

May not be very appealing at first glance but there is a dark and mysterious quality about this work estimated at $152,000~228,000 that pushes it into my top five. All it takes is two to make this shine bright at $350,000




RAM KUMAR (lo 65 Christies)
1980, Untitled

Est.$80,000~ 100,000




The vibrancy of this glacier blue landscape and the application of paint suggests a refreshingly spontaneous execution, perhaps during one of his trips to Ladakh. This characteristic Ram Kumar should easily ring in $225,000












JOGEN CHOWDHURY (lo 104 Christies)
2001, Untitled (four figures)

Be prepared to cough up close to $250,000 if you are seriously in the market for cross hatch works of this size estimated at $100,000~$150,000

Auction Picks II: Top 5 under $500,000

For those looking to spend a little less then the high rollers vying for the million dollar Gaitonde's lets take a look at some of the top modern lots estimated between $250,000~$500,000 and see which ones stand out




FN SOUZA (Lo. 39 Bonhams)
1956, Head of Christ

Est. $285,000~ $475,000





The unmistakable brilliance of Souza’s demonic heads comes shining thru in this work from 1956. Half a million dollars should be tribute enough for this late master that adorns the cover of the Bonhams catalogue



M.F. HUSAIN (Lo. 35 Christies)
1968, Untitled

Est. $200,000~ 300,000






Good Husain’s such as this are still a good buy even though his market has been lackluster of late. Should sell well for $450,000


J.SWAMINATHAN (Lo. 54 Bonhams)
1985, Mountain and Bird

This work estimated at $342000~$418,000 is from one of his most popular series. $550,000 would be a good price to pay for this attractive work


S.H. RAZA (lo. 48 Sothebys)
1955, Les Toits

An atypical landscape but interesting composition and colors of a Paris port town make this a desirable picture to own especially if you are a die hard Raza collector. Estimated between $200,000~$300,000 this should sell for close to $375,000


F.N Souza (lo 20 Osians)
1961, Red Landscape



This work Est. $222000~$278,000 was previously sold at Christies exactly a year ago for $132,000 and has made a quick reappearance on the auction block but the market for Souza is sizzling hot so this red landscape should sell comfortable for around $325,000

Auction Picks I: Top 5 over $750,000

It is not since the Chester and Davida Herwitz sale or the Christies London sales in June 1997 have I seen such a spectacular selection of top quality works assembled all together in concert.

Not surprisingly, its Christies once again who has the most impressive catalogue. With a total of 168 lots on offer, the Christies NY sale this month combines a small selection of contemporary superstars such as Atul and Anju Dodiya, Subodh Gupta and the like. With an overall estimate of about $12,000,000~$17,000,000 this is poised to be the biggest single auction of Indian art ever and the best we have seen in terms of overall quality in nearly a decade.

With over 600 lots on the block, I decided to look across auctions to determine my infamous top 5 list and as you can imagine, it was a daunting task given the sheer quantity as well as quality of pictures. Here are my picks for the top 5 lots in the modern section with an expected price tag of $750,000 or more

VS GAITONDE (lo.99 Sothebys)
1972, Untitled









This masterpiece estimated at $700,000~$900,000 is my pick for the top lot and it should sell for close to $1,500,000

Probably the finest Gaitonde to have ever come up in the auction market in a decade, this is a worthy contender for the world record and to dethrone Tyebs Mehta’s ‘Mahisasura’ as the most expensive Indian painting. This should generate lots of frenzy in the room and on the phone


FN SOUZA (Lo. 23 Christies)
1954, Man and Woman





Estimated at $300,000~$500,000 this is an important work from Souza’s most important period. Anything below $750,000 is a good buy but this picture could very well flirt with the million dollar mark


VS GAITONDE (lo.40 Christies)
1971, Untitled










Another class act by the master abstractionist. He did not do very many in his lifetime and this work estimated at $500,000~$700,000 should go for close to $800,000




FN SOUZA (Lo 38 Sothebys)
1953, Man with Monstrance

Est. $500,000~700,000






The high estimate on this picture by the great master would have been a fair price but trophy hunters might bid this cover lot by $150,000 more to secure bragging rights and making this the most expensive Souza relative to its size

SH RAZA (Lo 76 Christies)
1980, La Terre

It was a toss up between the Gaitonde (Lo 38) and this one but I chose the Raza Est. $300,000~$500,000 to break the Gaitonde monopoly of the top 5. This picture from the 80’s should bring in about $650,000 although works of this quality and period can even fetch close to $750,000 in a heated battle

Notable exceptions from this list are the two quality Tyebs (Christies Lo 63 and Sothebys Lo 121) both with pre sale high estimate of one million dollars and I have no doubt that both will find willing buyers and grab headlines...

september auctions: glut or glory?

There have been a number of articles in the recent press speculating the ‘glut effect’ of the upcoming auctions in September but I would like to present a contrarian view on the same.

The year 2006 will be the ‘tipping point’ for Indian art. A lot of people including well healed ‘art insiders’ thought I was crazy when at the beginning of this year I shared this chart suggesting that we will touch US$150 million in auction sales. It looked unattainable. The towers were already at dizzying heights and growing at 300% year over year. Where are the buyers? What will they buy? Prices have already reached sky high and bursting at the seams. Is there appetite for more?

Auction sales have already crossed US$ 70 million in the first six months of 2006 beating total auction sales of 2005 by 40% and the best of this year is yet to come! If H1 of this year is anything to go by, we are well on our way of achieving and even surpassing the $150 million estimate. As a matter of fact, I am fairly confident that this number will be breached with new world records for almost category before the year closes

There are not only more willing buyers but they are also prepared to pay more. As a matter of fact, the average auction sale price has risen from a modest $12,000 in 2003 to a staggering $82,000 per lot sold. (This is partly fueled by 90 paintings that sold for over $200,000 this year compared to less than 40 in all of 2005 and 1 in 2004)

This pace of growth is clearly not sustainable and it is not even reasonable to expect an endless terrain of triple digit growth however it will probably be a few more auction cycles and the economics of demand and supply (of money and of top quality art) before any price leveling begins.

strategy and psychology of auction estimates

Auction estimates are just what they imply – a price range within which the artworks are estimated to sell. This range is usually determined by specialists at the auction house in concert with the consignors and serves as a price indicator to potential buyers. However, if we take a look at auction sales for Indian art since 2003 we see a steady increase in works selling over the pre auction high estimate. As a matter of fact, since 2003 the number has more than doubled to over 80% of all lots selling above the estimate. This is because putting an estimate on a work of art is far from an exact science and is dependent on a number of interlacing factors such as timing and market conditions, reserve price as well as an overall auction strategy.

Timing and market condition: The estimates are set as much as 10-14 weeks in advance of the sale date to accommodate for catalogue printing and distribution and are therefore based on prevailing market conditions several months before the sale. In a buoyant market this could mean a 15-25% variance even in such a short duration

Reserve Price: As a rule, the reserve price (the price below which the seller is not willing to sell) is always below or at par with the low estimate. In a heated market where quality supply is in scarcity, consignors are able to demand a higher reserve in an effort to alleviate some of the risk of the work selling at sub optimal price levels.
Combined data on Indian art from all the auction houses reveal that the average selling price in 2003 was about 35% over the average low presale estimate rising to a staggering 115% over the average low estimate in 2006

Bid Psychology: Auctions estimates are also guided by an overall strategy on the part of the sellers - a low estimate tempts more bidders looking for bargains to actively participate in the sale. This increases the competition, the excitement and desirability for the lot often pushing the price to a higher level then if the same lot had fewer bidders. A low bid strategy works best in a scenario where the buyers are broad-based and sufficiently knowledgeable to make decisions based on quality, provenance, rarity, condition etc.

Based on the above we can conclude that at best, published auction estimates are imperfect indicators of fair market value especially in a buoyant market and they cannot be used in isolation to make bid/buy decisions. However, moving forward we are likely to see works selling much closer to their estimate especially as the market becomes more efficient and mature.