One may never know why veteran trainer Syed Sayeed Shah chose a two-year-old bay colt, ‘Sweeping Star’, from an auction catalog with over 140 horses. Neither would anyone know why Champaklal Zaveri, a Mumbai-based businessman and race enthusiast, weighed upon Shah’s recommendation and signed a cheque worth Rs 41.5 lakh to buy the reddish-brown horse. But Zaveri did write a fat cheque.
“My trainer SS Shah has won the most prestigious race – the Indian Derby – three times, out of which two were in successive years. We both have excellent rapport since long… he trains my horses and I only buy horses after consulting him,” reasons Zaveri.
“When ‘Sweeping Star’ came in to the auction ring, there were some seven people bidding for it… after some time, there were only two bidders left. We kept on bidding for the horse several times over. That’s when the price went really up. The horse was purchased in a syndicate,” he adds.
Sweeping Star’s record price has given a booster shot to the ailing breeding industry. This deal has reset thoroughbred prices at higher levels, and has bumped up sales numbers as well.
The RWITC (Royal Western India Turf Club) horse auction, held in Mumbai this February, booked the sale of 34 horses worth Rs 5.7 crore in total transaction value. The average price of horses sold in the auction ring was Rs 16.75 lakh – up from Rs 12.3 lakh and Rs 10.9 lakh in 2019 and 2018 respectively. Fourteen horses were sold at prices exceeding Rs 20 lakh each, reveals data sourced from RWITC.
“The market was strong at the top-end… There was significant demand for high-pedigree horses,” says Vivek Jain, former chairman of RWITC.
“With the prices achieved this year, one can expect better results in 2021,” he adds.
Indian breeders (many of whom are horse-owners too) had been facing headwinds on account of “a foal stock glut” – which started in 2014. Young-stock prices had crashed 40 – 50% in 2015 and 2016. This led to the closure of several stud farms across the country. The cost of raising a thoroughbred (up to two years, when it can be sold) is roughly Rs 7 lakh; during the lull years, several breeders were forced to sell yearlings at a loss (sale price lower than the price breeders spent to raise the horse).
LONG-AWAITED UPSWING
Between 2010 and 2013, Indian breeders imported nearly 700 mares to produce “better quality” foals. Their eagerness to improve the foal stock resulted in a glut with nearly 2,000 babies born a year. Indian race courses are equipped to house not more than 1,250 babies every year; anything above that means a good number of the new-born foals would remain unsold with breeders. Excess supply of yearlings every successive year has put pressure on horse prices ever since.
“We seem to have gotten out of the glut situation now… It has taken over six years and closure of several mid- and small-sized stud farms to get us here,” says the owner of Haryana-based stud farm.
Breeders (many of whom are owners too) make money by selling horses or by winning stakes in top races. The third revenue stream is offering “stallion services” – in which stud farm owners with accomplished stallions provide mating services for a fee.
“The supply of yearling has shrunk, and this probably is supporting the prices… But the industry is still in recession. GST is killing this industry,” says Ravi Reddy, president, Nanoli Stud Farm.
At present, GST is levied at the rate of 28% on total bet value. Turf clubs across the country have been lobbying with the government to lower GST to 18% – chargeable only on commission or service fee retained by the club.
“Racing survives on betting… if people don’t make money, why will they come to the races?” quips Reddy.
“Dwindling race attendance is hurting breeders in big way… Not many people want to buy horses to run them at the races any more. There’s no incentive for horse-owners to improve their stock,” adds Reddy.
This makes the ‘Sweeping Star’ deal portentous for many in the racing world. They see it as a sign of good times ahead. Would the bay colt sprint as fast as cash in its buyers’ wallet? Only time will tell.
