Cashing in on a Rare Fortune

Chandralekha Mukerji | Print Edition: July 2011

"Money attracts more money"!

Ask seasoned investors whether they agree with the saying or not, and more often than not, they would nod in agreement.

Ask a numismatist the same question and he would probably say that passion and understanding is more important or you may even loose what you have in hand. But on the other hand, with a bit of interest and insight on the art of collecting coins and paper money one can expect handsome returns comparable to traditional investments.

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And, unlike other costly collectibles, you do not have to break a bank to start a collection of coins and currency.

"Contrary to the popular perception, one need not be a high networth individual to enter the numismatics market. Price of commemorative coin sets starts at around Rs 2,000-3,000, which even a middleclass salaried person can easily afford. On the other hand, some rare British-India 'gold-mohurs', can be as expensive as Rs 4 to 5 lakhs each. So, there is plenty of opportunity for people looking at exotic investment options as well," says Sanjay Kansal, a Delhi-based numismatist, who has a large collection of post-1947 commemorative coins.

Barely a few years ago, the Indian numismatics market was restricted to a few coin collectors, mostly from metros. The idea of numismatic as an investment tool is still in its nascent stage but is fast catching up in India.

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"Though the number of investors has been growing rapidly in the past few years, compared to the numismatics trade in the western countries or other popular alternative investment channels such as fine arts, wine, etc., the volume of trade in coins is still low. One of the major reasons being lack of awareness," says Girish Veera, a Mumbai-based numismatist and co-founder of Oswal Antiques, one of India's leading numismatic auction houses.

"Coins and bank notes can be ideal investments to diversify your portfolio. As more collectors are getting interested and the supply is comparatively less, it can be a very good investment channel for investors who are looking for longterm gains. But those looking for high returns in the short-term, should avoid putting their money in coins," suggests Farokh S Todywalla, proprietor, Todywalla Auctions, a top numismatic firm and numismatic auction house of the country.

"The middle-class, which has modest resources, can also plunge into this market now when it is in its growing stages. The prices of coins are still relatively low and are bound to go up in the near future," adds Todywalla.


ALTERATION: intentional tampering of a coin usually to make it appear more valuable.

ANACS: American Numismatic Association Certification Service, one of the original grading and certification service for coins.

BLEMISH: a surface flaw or appearance of imperfection on the surface of a coin. Marks, discoloration, tarnish, spots, etc. are examples of blemishes.

COMMEMORATIVE: coin with a design honoring or as a reminder of a specific person, place or event.

DOUBLE DENOMINATION: a rare error in which a previously struck coin is re-struck by the die pair of another denomination.

EXONUMIA: also called paranumismatica, are non-monetary coinlike objects such as tokens, etc.

MINT STATE: uncirculated and in the same condition as when delivered from the mint.

PROOF: a coin specially manufactured to have extra sharp detail, mirror like fields and sometimes frosted or "cameo" devices.

SERIES: coins of the same major design and denomination.

VARIETY: any coin struck from a die pair that differs from others with the same date and mintmark, such as one exhibiting die doubling, different style letters or numerals etc.
Since these are rare items and can't be reproduced, the value will only increase with the rise in demand.

"Moreover, if you have chosen to invest in ancient coins which are mostly in either of silver, gold or copper, you are sure to get a price for the precious metal at least in case you are in a hurry to liquidate," adds Rajender Maru, a Bangalorebased numismatics dealer.


While the dictionary simply defines numismatics as the study of coins and medals, it is a much wider and complex field than that.

As a collector, apart from coins and medals, you can also look at paper currency, tokens and other legal tenders. But if your objective is only to invest, restrict yourself to buying commemorative, ancient and rare currency.

Commemorative coins are available in two varieties - proof and uncirculated. Proof coins are specially made coins of the highest quality, having first-rate mirror finish contrasting with frosting on the relief (the raised portion in a coin), and are therefore of higher value.

Also, the commemorative coins which have been issued by the government so far have various denominations ranging from 5 paisa to Rs 100. Error coins, coins with flaws that occurred in the minting process, fall under the rare category and thus can fetch much higher prices.

Since there are many coins minted in each era, it is impossible to collect all of them.

"A collector should concentrate on one particular era, theme or subject such as Republic India, British India, princely states, Mughal sultanates, ancient coins, etc. to begin. Joining a numismatic society and being in this circuit can help in gaining knowledge on the subject," says Maru.

Expensive Exemplar

Flowing Hair Dollar (1794), 7.85 mn dollars or Rs 35 cr

US Double Eagle (1933), 7.59 mn dollars or Rs 34 cr

Mohur of William IV (1835), Rs 6.5 to 7 lakhs

Auction houses or coin dealers may not be the best place to start buying your collection. "For the beginners, the best place to buy commemorative coins would be directly from Government owned mints. Mints at Mumbai and Kolkata sell commemorative coins," informs Kansal. Whenever a new commemorative coin is issued, the mints offer bookings to the public.

"One can book online or send a demand draft to these mints. The coins are usually delivered six to 12 months after booking. If someone misses this direct booking opportunity, they can go online and buy through portals like eBay," adds Kansal.


As mentioned earlier, the key to success in this field is knowledge and patience. "Don't just buy coins on impulse. Try to read about them as much as possible before you take a plunge. Two coins may look exactly the same to you but a minor variation could mean a huge difference in their value," warns Kansal.

Beware that there are many fakes floating in the market. Also, there are "tribute" copies of rare coins which were minted to enable collectors to possess a facsimile of the difficultto-own original piece. Though these are not minted to deceive the buyers, if you are naive or are unaware you can end up paying a hefty sum for a mock item. "Therefore, it will be wise to know all attributes of the coin such as weight, diameter, metal composition, year of issue, mint etc., before you actually buy it. Also beware of sellers using adjectives like 'rarest', 'super rare', 'extraordinary' etc. to sell there items. Putting an astronomically high price tag or extremely low value is another trick to deceive," says Kansal.

Since the Indian numismatics market is not regulated,, it is recommended that you buy coins and paper currency only from reputed dealers and auction houses who give guarantee on the authenticity.


Investment in coins can coexist or supplement your traditional portfolio of stocks, bonds, mutual funds, etc. However, it is important to remember that coins can give substantial returns only in the long-term.


Recently, Delhi Police chased two thieves from Delhi to Rajasthan for a bundle of Re 1 notes. Sounds absurd? Not if each note is approximately worth Rs 25,500 and the whole bundle worth Rs 32 lakh. The 1964 notes were a rare bundle bearing the signature of the-then finance secretary S Bhootalingam

Preserving your investment

Knowing how to preserve a coin is important. Some common guidelines: Handle coins only from the edges; do not touch the obverse or reverse; try to keep them in their original form; never clean a coin to make them look new or add fake luster; do not fold or laminate a paper currency. Consult an expert for specific methods of preserving rare items.
An investment in a single rare item is better as chances of appreciation in its value are much higher, but you will need to make a sizeable investment to buy one.

One can consult catalogues like the Standard Catalogue of World Coins for getting an idea of the price of a coin.

However, these are published annually, so the weekly or monthly price fluctuations would not be available. The price of a coin typically would depend on its rarity, condition and series and are chiefly governed by demand and supply.

"Coins with low mintage numbers will always be costlier. Abroad, weightage is also given to the quality or grade of the coins. Unfortunately, in India professional grading is yet to pick up," informs Kansal. One can monitor eBay transactions to know the value.

Investing in coins will have its own risks. So, consider taking some help from experts.

"Like one approaches portfolio managers to get best returns from stock and bonds, one should consult an advisor with knowledge on the subject for returns from coins as well," advices Tody-walla, who has been in this business for 47 years. Some auction houses and coin dealers can also provide valuation of the coins for a small fee. However with very few professionals in this field, this is yet to pick up in India.

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