Back To The Future: The Auction Sales return in earnest to RWITC!

Indian racing goes through a torrid period under the new GST regime, from an average tax of 8% on turnover our learned government has slammed us with an exponential increase to take it up to a crazy 28%. Further to that they’ve decided to tax the sale of horses at 12% something that ought to net the Indian Government a princely Rs. 5 Crores or so annually in a country where revenue collection runs to over Rs. 8500 Billion per month. The GST regime which was supposed to simplify life has further complicated matters. My home state of Punjab has seen a drastic decrease in revenues and hopefully our Finance Minister’s pleas in the GST Council are addressed. Meanwhile Halwais are scratching their heads as their Kaju, Pista, Badam, Chocolate and Khoya Burfis each attract a different GST rate, when this gets sorted maybe the Government will consider the damage a crazy 28% GST on betting will cause the industry and fix a more sensible rate which will cause the punter to bet legally on the tote rather than with illegal bookies who’re the largest beneficiaries of a 28% rate, if the rate was 150% they couldn’t care less since they’re going to pay the Government a big fat ZERO in any case.

Bangalore has finally been able to get their Winter Season going in the New Year after their standoff with the Karnataka Government and more specifically the Chief Minister of the Southern state. One wishes our industry understood that they provide a significant 35,000 jobs and the Turf Authorities of India must understand the responsibility of that and behaved as such. BTC lost over Rs. 20 Crores in revenue from inter-venue betting as a result of the problem and this is definitely going to manifest itself down the line in reduced stakes for owners and redundancies as a result. BTC has acted swiftly and the curtailed season has an action feeling about it, since there is a graded race pretty much every week.

The Annual Auction Sale conducted by RWITC in February this year finally ceases to be a misnomer and February 12th and 13th will see a proper auction after over Three Decades of the “Annual lets walk around in circles” that the sales had actually become. Last year Madras Race Club took the lead by conducting a sale where once a horse arrived on the premises it had to go through the ring. They conducted a sale this year too but the quality on offer was not as good as the previous year, neither was the sale promoted properly. My takeaway from that sale was that farms which brought decent stock to the sale, saw them sell pretty well. Breeders have had it difficult for a very long time but at the same time they’re protected from market exposure as when they sell privately, they are able to build their brand equity on perception and personal relationships rather than results and market forces. I saw a large number of horses go through the ring at Chennai with no bid, I’m glad that it was the case as a few of my colleagues ought to be ashamed of what they brought to sell to the buyers, these horses were stunted as a result of being poorly nourished and cared for by their breeders. On the other end of the spectrum is Nanoli Stud who entered just one in the Madras Sale. A nice Chestnut Colt who looked the part of being a half brother to a classic winner and from a top class dam line. Two trainers locked horns for the offering, the result was an all India Auction record as the colt was knocked down to Chennai based trainer Craig Marshall for Rs. 2.05 Million plus another 12% to be paid as GST. That apart those who turned out good stock such as my boss in the NHBSI, went back with 100% clearance and satisfaction. The sale wasn’t promoted in the right way and despite that 38 horses found buyers at a fair average of Rs. 6 Lakhs.

Selling horses by auction is the norm the world over as it’s a transparent and fair system by which the true market value of stock is reflected in the sale price. It’s very fair to the buyer as it gives everyone an equal chance of buying horses irrespective of their connection with any breeder or stud farm. Similarly it does away with any cloak and dagger system of a private sale where unscrupulous breeders can be in cahoots with unscrupulous trainers in duping an owner.

Not many are aware that the foal crop this year is one of the smallest in almost three decades. Race Clubs mayn’t be facing the problem right now but it’s just a matter of time before they find it difficult to fill fields. This can be seen with the large number of 8 and 9 and even 10 year olds racing at all centres. There was a time when these were shunted out of racecourses with disdain.

Coming back to the sales, one sees the RWITC and the Stud Book Authority working hard to promote it. This is refreshing and I as a breeder am cautiously optimistic of the outcome of the sale. All our stock comes to the sale with a clean scope and vet certificate, I feel a clear tracheal endoscopy (scope) certificate ought to have been mandatory for sale entry along with a clean vet certificate as a further protection for buyers. India’s leading stud farm Usha Stud and a majority of breeders are bringing horses to the sale with clear scope certificates. The sale has been supported across the spectrum of breeders and a big advantage is going to be immediate settlement for them rather than chase owners for payments over 12 months which is at least for me a truly demeaning experience. The auction process will hopefully keep people who can’t afford horses but buy on the never never, out.

The transparency that the auction process provides will also encourage new owners to buy a horse with confidence at what is fair market value at the time. Many years ago when Saddle Up raced well in Malaysia and Singapore there was a genuine interest in buying Indian horses from Malaysia. The problem the buyers from there had was that they were uncomfortable buying horses in private deals as they felt they might get ripped off. I know it’s an outside chance but if we keep faith in the process, buyers from South East Asia might find that Indian horses are a viable option for them as our prices compared to Europe, Australia and USA are a small fraction. Further the few we’ve had travel to foreign countries have represented us well. Saddle Up was at one time the best horse stabled in Singapore, Polar Falcon won in Singapore at a high level. Mystical won two races in the highly competitive Dubai Racing Carnival. Beat It Dude at one time stood Seventh in the handicap ratings in Seoul, South Korea in a population of over a Thousand horses based there and drew in to run their biggest race, the Grand Prix which is open only to the best Fifteen horses based in South Korea. Southern Regent won a decent handicap on the all weather in England when he was well past his prime at the age of 9. Adler won a high level allowance at Ellis Park for Bill Mott, Ellis Park used to have a short and competitive season on the Kentucky circuit, in between Churchill Downs and Keeneland’s fall meet. Many years ago Astonish won a Class One race in the very competitive environs of Hong Kong. We all await our champion miler, Serjeant At Arms’s American career in the hands of Kentucky Derby winning trainer H Graham Motion. I went to see him at Far Hills Training Centre recently and he was settling in well. So maybe not this year but after a few years we might find some foreign buyers coming to buy at our Auction sales.

As a vendor I’m very encouraged by the way the RWITC Management has gone about promoting the sales this year. They’ve been running slickly made promotional videos during their race meetings which go out on their live video feed. The concept of a select session and the blue pages is a good idea too and one hopes it’s a success. The entire concept of an auction is new to the current generation of owners, breeders and even the management of RWITC. Old timers tell me that this was once the norm and many champions sold in the Auction ring. I’m of the opinion that the entire process is a step in the right direction and it might not be a resounding success from the get go but we must stick with it, as in a few years I guarantee it will succeed. The practice of selling horses privately at farms will continue but I see no reason why RWITC should allow us to use their facility to conduct private sales. Due to a smaller foal crop the timing for this experiment is perfect. The Catalogue looks nice and tight and from the looks of it there’ll be about 150 or so coming for the sale. Thats a good number, many of the country’s top stallions will be represented as will many top breeders. Craig Marshall doesn’t know it yet but at Guindy the other night he might have provided that little spark to ignite the sales in Bombay. So here we go into the unknown and start a process which funnily is the norm the world over. I for one am optimistic and look at the glass half full and maybe just maybe that glass is going to overflow!


3 thoughts on “Back To The Future: The Auction Sales return in earnest to RWITC!

  1. Nice one. I wish you all the very best of fortune with this. As you say this business of chasing up ‘stage payments’ is sleazy and upfront payments should be the norm. But I remain amazed that Rs 20 L is the Chennai Auction record… that is extremely low by any Standards.
    Have you considered taking up Horse Syndicate Management where the whole process … Auction – pre-training – selecting a trainer – weekly email updates – visits to the Trainers’ Yards – Social meetups – Racing badges – eventual sale… is co-ordinated by your man (or woman) as Syndicate Manager? It could prove highly lucrative (up front payment of purchase and training mandatory) and a way of attracting good ‘white’ buyers into the Sport.

    • Not sleazy but demeaning, Ameeta Mehra has written about it too. We need to start operating professionally and above board. 20 L is a great price. If our racing was run professionally in a corporate manner with good business practices, the tracks would earn more money as such they’d be able to pay out better stakes to owners which would drive up prices for breeders’ stock as a result. Alas the club system keeps the sport poor. Horse Syndicate Management as done successfully abroad by people like Highclere Racing would be very viable but unfortunately in India the ROI is poor and thus the concept though good isn’t very attractive. Also RWITC and RCTC apart hospitality at our tracks is very poor and an alien concept to our administrators and the very least we should be able to offer a syndicate member is a fun and comfortable day out at the races.

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