About the Author:
- Amit Bhandari is the Founder and CEO of tezbid.com, a leading Indian portal dealing in antique coins and banknotes
Gold and silver have always been popular with Indians – for investments as well as gifting. A recent report said that Indians hold an estimated 24,000 tons of gold collected over generations – worth over 2 trillion dollars at current prices! The ancestral wisdom is borne out by numbers – in the past 12 months, gold prices have gone up by 22% while silver is up by 32% – whereas Nifty has gone up by just under 10% over the same period. The lesson is clear: a long-term investment portfolio must have bullion in addtion to stocks.
While there are many ways to invest in bullion – hallmarked bars, exchange traded funds etc, the easiest and increasingly popular way is via antique coins. Prior to the Second World War, most of the major world economies – India, UK, USA etc, used silver coinage for everyday transactions. These coins were minted in massive quantities – hundreds of millions in some cases, and continue to be widely available at affordable prices.
Coins as an Investment
As a coin collector for over two decades, and now the founder of tezbid.com, I have interacted with hundreds of collectors – and I find an increasing interest in antique silver coins in the past few years, not only from collectors but also investors. Antique coins combine bullion value with historical significance, making them more popular with collectors. Collectibles such as art, anqtiques and old coins are a well established asset class in mature economies, and are fast gaining that status in India as well. Within these ‘alternate’ asset classes, coins are perhaps the most mainstream – with a large, liquid market and transparency in prices. Multiple catalogues, auction houses and online platforms provide a good estimate on coin values. Another advantage is that old coins are not wildly expensive – unlike art or real estate. You can buy coins for a few thousand rupees – or higher amounts depending on your budget – something not easy to do with many other investments.
The most popular coins amongst Indian collectors are British Indian silver rupees – because they are the most common. However, in the past few years, I have also seen coins of Indian kingdoms such as Kutch and Travancore, and the Maratha empire gain in popularity – with a corresponding rise in prices. Another category that has become very popular with collectors is Indo-Portuguese coins – coins of Goa and other Portuguese posessions in India. Tezbid.com has the largest online collections of coins of Indian kingdoms such as Kutch, and coins of Goa.
A 100 year old silver one-rupee coin from British times (say 1920s) will have a bullion value of over Rs 900 at today’s prices, while a silver coin from 1940s (80 years old) will have a bullion value of over Rs 500 – meaning compounded annual growth rate of 7% and 8% respectively! The actual value is higher due to their historical significance. Few assets or asset classes can survive for this long – even blue chip companies don’t last that long! For rarer coins such as coins of Goa, and Indian kingdoms such as Kutch and Travancore, the gains are even higher.
The India Story
There is another factor working in favor of Indian coins, as well as other collectibles: India’s growing economy. In the year 2000, India’s economy was the thirteenth largest in the world. It is now the fourth largest – behind the USA, China and Germany, having pushed Japan out of the fourth spot. By 2030, India is projected to climb to the third spot, after the US and China. As India grows, Indians will also get better off and spend more on leisure – including hobbies and collections.
As the Chinese economy boomed in the early 2000s, prices of Chinese antiques shot up as newly rich Chinese consumers started to snap them up. It is natural that newly prosperous Indians will have a greater interest in their own history – a factor which will provide an added boost to Indian collectibles. To some extent, this trend is already evident – older Indian coins and banknotes are more valuable than their counterparts from neighbouring countries such as Pakistan, Nepal and Sri Lanka. This trend is going to become more pronounced over time.