Dawnay Day set for foray into art

The $10-billion UK-based investment major Dawnay Day group is foraying into art business in India. It will have its own corporate art collection, online auction house and an art fund.

To begin with, the firm will start an online auction house to sell contemporary Indian art world over. The initial investment is Rs 50 crore, which will be scaled up to Rs 200 crore in the subsequent years. An expert would be signed up soon to spearhead the venture, said Arpit Agarwal, MD and CEO, financial services, Dawnay Day India.

The auction house planned will compete with domestic online auction houses such as Saffron Art and Osian's and international auction biggies such as Christie's. The domestic contemporary art market is estimated to rise to $1 billion (Rs 4,500 crore) by 2008.

As part of its corporate art collection, the company has bought over 250 pieces and sees it as a good investment option. It has already bought the works of M F Hussain, Tyeb Mehta, Ramkumar and other leading artists.

The company is also planning to set up an art fund. It is waiting for the regulatory and policy guidelines to be put in place. This is the first time Dawnay Day is planning such a fund.

Agarwal believes the company's experience in art collection and its operations across the US, Europe, West Asia, Australia and Russia will help woo customers. Dawnay Day Chairman Guy Naggar and Chief Executive Peter Klimt had been collecting art, including those from India, for the last 20 years.

Both of them have a personal collection of over 2,000 pieces.

"India has great artists. Price of Indian art pieces has gone up 25 times in recent times. We are exploring the possibility of setting up an auction house for Indian art," Guy Naggar had said on a recent visit to India.

Agarwal said the idea of foraying into art started with decorating their hotel, residential and commercial properties.

"We began with buying art of not more than Rs 1 lakh. Subsequently, we moved to Rs 5-20 lakh. Today, we have highly expensive pieces. Even if they do not appreciate, they would form part of our personal collection," says Agarwal.

Dawnay Day has lined up funds to the tune of $1.5 billion to invest in realty here. It has three subsidiaries - financial services provider and advisory firm Dawnay Day AV India, Dawnay Day Hotels India and real estate development firm Dawnay Day India Land.

Dawnay Day Hotels India has plans to invest $200 million to build 10-15 hotels in three years. It has acquired properties in Pune, Ahmedabad, Delhi and Jaipur. They are close to finalising deals to buy properties in three other cities.