Art of funding
Take sundry square inches of canvas, mix a few colours and daub them on. What is it worth? Anything a beholder will pay for it. If the person who wielded the brush is on the list (see Millionaires' Club), that is one hell of a lot. The creative fantasies of those gents (and of several others including at least two women) regularly fetch eight figures at auctions. In the past three years, the average price realised by the works of frontline Indian artists (quite a few of them dead) has risen by over 1,200%. Tyeb Mehta was the first to break the $ 1 million barrier when Mahishasura sold for the equivalent of Rs 7 crore at a Sotheby's auction in September 2005. Since then, several others have followed in his wake.
According to some estimates, the Indian art market is worth an annual Rs 1,125 crore. It is definitely of substantial size; over Rs 675 crore of Indian art was auctioned in 2006. Small wonder that there are plenty of investors eager to enter the world of art even if they don't know a bristle from a pixel. And, there is increasing emphasis on institutionalising transaction modes in a market notoriously susceptible to fraud, smuggling and theft. Perhaps one in every five paintings sold is a fake. Bikash Bhattacharya was not the first artist to be affected by "copycats", though it created headlines when a fake Bikash was offered up at auction. Edvard Munch's Scream is just one of hundreds of stolen works. So, it's a lucrative market but it's definitely not for the uninitiated. Nor is it a playground for dabblers without deep pockets. That being said, the structure of art funds makes sense. There are three major Indian art fundsYatra, Osieta and Crayon. All asked for minimum subscriptions of Rs 10 lakh. All are closed-ended with lock-ins of several years. Each garnered Rs 40-50 crore from high net-worth individuals within a few days. Now Osian's, which runs the Osieta Fund, is taking the next logical step in market evolution. The art foundation has completed a private placement of 9.89% of its equity at Rs 1,400 per share to raise Rs 55 crore for its war chest. Implied valuation of Osian's: Rs 590 crore. And since, Osian's says that its collection is worth over Rs 900 crore, it is "trading below book value. Neville Tuli, chairman, Osian's, says, "Osian's will hopefully become the first arts-cultural institution to become a listed public company. In time we will prove that great cultural institutions can be built from a corporate entity base."
EMI credit cards
You multiply your shopping, we divide your payments—that's the lure being dangled by banks nowadays to hook people into buying EMI Credit Cards. Standard Chartered Bank was the first to launch this supplementary card, but recently ICICI Bank has also begun to market theirs aggressively. If you are already an existing credit card holder the banks will be happy to issue you an EMI Credit Card too. An EMI Credit Card enables you to buy a product or service above a basic minimum and pay for it in easy instalments spread over the loan tenure. Most banks already have a facility to convert any purchase made on your credit card to EMI payments by calling up customer care before the payment due date, but there is no such hassle with this card since the purchase automatically gets converted into EMI payments. No documentation, no paperwork, no down-payment and no postdated cheques—all of which are required for a personal loan—certainly make this card seem very attractive at first glance. Low interest rates (ranging from 1.49% to 2% per month) seem to clinch the deal. This is exactly where it differs from a purchase converted into a personal loan on your credit card where the interest rate is marginally higher. Furthermore, on a credit card you buy now and pay next month unless you want to roll over your credit, which is always a bad idea. In this case you buy now and pay over a much more flexible tenure. Standard Chartered's Instabuy allows purchases above Rs 2,000 to be spread over a maximum tenure of 24 months whereas ICICI Bank has a fixed EAD (EMI Amount Due) of Rs 1,000/2,000/4,000 with flexible repayment tenures.
But these cards are not a panacea for your buying binges since all pur- chases are subject to credit limit on your credit card. Also a transaction or monthly instalment payment is charged for every single transaction. For example, ICICI charges Rs 149 per transaction. Standard Chartered charges Rs 53 as monthly instalment amount for every Rs 1,000. So if you have to pay a monthly instalment of Rs 3,000, you will also have to pay Rs 159 as the monthly instalment charge. Plus there is less flexibility since you have to pay your instalments whenever they are due and you can't revolve your credit as you may do with a personal loan or credit card. So go ahead on a shopping splurge today, but do think before you flash that plastic.
by Namrata Dadwal
Age no bar
Old age and ill-health usually go together; and to be outside the purview of health insurance is an added burden that senior citizens had to face until private insurers started offering policies to them. However, the big impetus to this category of insurers happened with the launch of Varistha Mediclaim by the National Insurance Company. Says V. Ramasaamy, chairman and managing director, of the company, "Unlike other companies we allow a person to sign in the policy at 60 and renewals are accepted till the age of 90." This is one feature where this policy scores over others. However, the sum assured for healthcare and critical care is fixed at Rs 1 lakh and Rs 2 lakh, respectively, unlike other insurers who offer a wide range from Rs 50,000 to Rs 5 lakh cover. On the premium front too the policy does not come cheap, considering it has split healthcare and critical illness. Where this product stands out is the waiting period to cover pre-existing diseases. If you disclose pre-existing diseases at the time of taking the cover and don't make a claim in the first year, those pre-existing diseases will be covered from the second year. By comparison, other insurers have a waiting period of three to five years for pre-existing diseases. Though a good plan, it will help many elderly people with the safety of continuing with a health insurance plan. However, if they have not encountered any adverse health condition till 60, they may as well look for a plan that offers a wide cover than the narrowness that Varistha Mediclaim offers Indicative premiums for healthcare costs in Rs (not critical illness) for Rs 1 lakh sum insured
by Narayan Krishnamurthy
SMS your payment
Move over plastic money. You can now pay your bills through SMS without having to disclose your credit or debit card information during the transaction process. Mobile payment solution provider PayMate has launched its services in collaboration with Citibank. The service is currently being offered only to Citibank credit card and banking customers. To use PayMate, Citibank customers need to sign up for this free service with the bank by simply sending PayMate as an SMS to 2484. The customer will then be registered for the service following which they can conveniently pay at any of PayMate's accredited merchants via a single SMS. PayMate is in the process of tying up with several merchants for online shopping, travel bookings, airline and film tickets, telecom companies, utilities, insurance companies, cable and broadband services, tele-shopping, etc., for bill payments through SMS. PayMate has a ceiling of Rs 5,000 per transaction and Rs 10,000 per day but the limit is likely to be done away with as the number of customers increases and the mode of payment becomes popular. This process completely rids the customer of the need to carry credit cards or bundles of cash. The entire transaction takes place at the cost of a single premium SMS (Rs 2 for most service providers). If an item needs to be returned the merchant will inform PayMate to roll back the transaction like in any other mode of payment. Security There is a unique alpha code for every transaction which serves as a dynamic PIN apart from the unique PIN provided to the customer. In case the phone is lost, the account can be disabled by making a call to PayMate.
by Rakesh Rai
As ornaments or investments, the world still swoons over the yellow metal. Old threats like silver and diamonds or new fancies such as platinum, none have succeeded in taking off its sheen. Famous for its obsession with gold, India doesn't disappoint with it ranking first in Google searches. Silver is second with diamond and platinum jostling at the tail end. Despite being the diamond cutting hub of the world, the sparkling stone finds few takers in India. It is even bested by platinum in places like Bangalore and Noida. Jaipur surprises by an overwhelming love for silver. A similar order of preference is seen worldwide. South Africa, which sits on one of the biggest diamond mines of the world, stuns by choosing platinum over them. Though investment horizons in jewels are expanding, for sheer value or the love of trinkets, gold remains mankind's best friend.
by Kamya Jaiswal