Auction house Saffronart's 25th Anniversary Evening Sale last Saturday was a gilded frame-worthy moment, stacking up as it did ₹355.77 cr in sales and setting a global record for South Asian art. It was symptomatic of Indian art currently smashing records as more money chases works of top artists. The price signals are becoming stronger in the most select ring of contemporary artists. This is being driven by a combination of rising affluence, a younger and more cosmopolitan clientele, and rising awareness of art as an asset class. The market, however, needs to broaden to cover a larger pool of artists. It will then work as a clearing mechanism for a relatively untapped segment. The social, financial and artistic values of owning art must be better aligned to serve as a factor shaping the supply response.

Turnover in the art market is growing through higher volume rather than price. Randomness in being 'discovered' results in oversupply at any given price. Correcting for this requires a deepening of the market mechanism through institutional capacity. A growing mass of investors can pull more art into the market, making the process self-sustaining. This applies particularly to traditional art, where the pipeline is wide but the price signalling is not as robust as in contemporary art. The good news is the notion of art as investment is contagious among the newly affluent. Spillover from contemporary masters to the lesser known may be slow, but it is happening.

Indian art is undervalued by international benchmarks. This should keep returns on investment lofty for an extended period. Financial value of any investment in art is strongly correlated with the social value of art ownership. This element is rising across income levels. As Indians travel overseas in larger numbers, they are exposed to the social and aesthetic relevance of art available at home. They represent a new class of buyers raring to set new benchmarks in pricing local art. A new aesthetic is emerging.