India is the fastest growing major economy in the world, according to the International Monetary Fund (IMF). On course to grow 6.2% in 2025 and 6.3% in 2026, the IMF has projected that India will deliver annual growth of nearly 6.5% every year until 2030¹.

In contrast, global growth is expected to peak at 3.2% in the latter half of this decade, while advanced
economies will struggle to collectively surpass 1.7%, according to IMF calculations².

It’s safe to say that India is something of an outlier and, arguably, warrants greater consideration
by investors.

Informal to Formal

The drivers behind India’s growth are hugely varied, but the contribution made by the country’s entrepreneurs should not be overlooked or underestimated.

This confidence isn’t hyperbole. India’s Ministry of Micro, Small and Medium Enterprises (MSME) estimates that, as of the end of 2024, there were more than 63 million such businesses across the country⁴. Part of the ministry’s remit is to help these businesses transition from the informal to the formal economy, which ultimately feeds a virtuous circle of enhanced productivity, increased tax revenue and a
stronger economy.

To better understand entrepreneurship in India, we reached out to some of the companies in the Alquity
Indian Subcontinent Fund to ask about their experience of building a successful business.

Fashion and Film

For Lalit Agarwal, founder of retail company V-Mart, having worked in his father’s tailor shop when he
was young, starting his own affordable fashion business was a natural step. “Retail runs in my blood – quite literally” he says.

“V-Mart was born out of a simple but powerful thought: that quality fashion and fulfilling family shopping
experiences shouldn’t be limited to urban India.”

Agarwal saw a gap in Tier 2 and Tier 3 cities, where the populations are between 100,000 and 4 million
people. “The vision was to democratise retail, to bring value, style and dignity to the everyday lives
of Indian families.”

Having opened its first store in 2003, V-Mart now has more than 500 locations in over 315 cities
across India.

Source: V-Mart. Data as of 30th June 2025.

Entrepreneurs set the tone. They are the foundation on which their companies are built; their values, ethos and approach to governance and culture permeate the business. For Alquity, the behaviours and mindset of the founders are one of the strongest indicators as to whether a business can grow and be successful over the long term.

We’re Just Getting Started

Inspiration can also come from unlikely sources, and for Aloke Bajpai, co-founder of online travel agency
ixigo, it proved to be a touch of Bollywood magic.

While living and working abroad, he watched a Hindi-language film called Swades starring Shah Rukh Khan as a NASA engineer who returns to India, rediscovers his love for his homeland and becomes inspired to make a difference. “It really moved me, the idea of coming back and building something meaningful here struck a chord.”

Bajpai reached out to his friend Rajnish Kumar, who he met while studying at the Indian Institute of Technology (IIT) Kanpur. “We both felt a strong urge to return and create something impactful for India.” They started their careers at European travel technology company Amadeus and their return to India in 2006 coincided with a rapidly growing travel industry. “Given our background, we were convinced it was the right space to build in,” Bajpai adds.

In 2007, ixigo was born, “with the goal of simplifying travel for millions of Indians”, he adds. “Today, we are India’s leading online travel agency for the ‘Next Billion Users’.”

He adds: “We started by solving for utility and convenience for the masses, before evolving into a transactional platform. Today, we lead the online travel agency market in trains, are aggressively scaling in flights and buses, and, in the near future, we plan to focus more deeply on the hotel vertical.”

That’s not to say that building a successful business in India is easy. Far from it. A third company, which
chose to remain anonymous, operates in rural India and has witnessed many rivals come and go. “Out of
40-plus, only 5-6 continue to operate today” a spokesperson says.

“We have not disrupted [our industry] yet, we have made lives a little bit simpler with technology, but we are just getting started.” The key is building trust. “Customers need to identify a local person, who is a son of the soil, whom they can trust.

“If someone takes a shortcut to fast-track a business, it often results in the setting up of bad practices and
impacting the life of the business. We avoid doing this, focus on iterating, problem solving and adding real value,” the spokesperson adds.

For the Alquity Indian Subcontinent fund team, it is this mentality, this long-term vision and commitment
to doing the right thing, that truly sets some entrepreneurs apart and is a core part of Alquity’s inhouse
analysis of ‘Governance’. Genuine long-term value is built when businesses adopt a focus on all stakeholders from the outset, including employees and minority shareholders.

The Next Generation

As the Global Entrepreneurship Monitor shows, there is no shortage of budding business founders across
India. So, what advice would Bajpai and Agarwal share with the next generation?

For Agarwal, it’s “stay rooted in your purpose, but agile in your path”. “India offers immense opportunity,
but success demands patience, resilience and integrity. Surround yourself with people better than you
and never stop learning. Looking back, I would say trust your gut more, don’t wait too long to take bold bets and, above all, believe in the impact you’re creating.”

For Bajpai, entrepreneurs need to get used to hearing the word ‘no’. “When we first started ixigo, Rajnish
and I pitched to a VC in Bangalore. After explaining our idea and business model, we were told, ‘I’d be
surprised if you ever raise even $100,000 for this, you’re wasting your time’. “It was a crushing moment. But instead of giving up, we used that rejection as fuel. A few months later, in February 2008, we raised a seed round from a Singapore-based VC fund, BAF Spectrum. That funding created a ripple effect, many of the investors who had turned us down initially came back with interest.

“The key takeaway? A ‘no’ doesn’t mean you’re on the wrong path. Sometimes, it just means you’re on a
difficult or unconventional one. And if you’re willing to persist, you might just end up creating an entirely
new market.”

Bajpai also recommends budding entrepreneurs “be extremely selective when hiring and don’t hesitate to
let go of misfits”. “Every single person – from the founders to engineers, marketers and support staff – plays a vital role. The team’s collective passion, perseverance, user empathy and hunger to win will be your most valuable asset, not the $20m in your bank account. That kind of drive is irreplaceable.”

Then there’s culture, he adds. “It isn’t about posters on the wall, fun Fridays or free lunches. It’s reflected
in your everyday actions and decisions, how you treat failure, how you give feedback, how you reward
success, how you make hiring and firing decisions. Culture is built through trust, mutual respect and a
shared sense of purpose. It’s not what you say in town halls; it’s what you do when no one’s watching.
Ultimately, culture is about being ethical, accountable and deeply human.”

Bajpai continues: “Don’t be afraid to experiment. In a fast-changing world, the companies that
evolve quickly, test new ideas boldly, and fail fast are the ones that scale. At ixigo, we’ve learned that
experimentation must be intentional, and data driven. Try lots of things, with full conviction, but when
the data says it’s not working, be quick to shut it down. Don’t blindly copy competitors. Learn from their
successes or failures first, then decide if it’s worth trying. Balance your resources between doubling down
on what’s working and experimenting with what might work next. That’s how you stay ahead.”

Conclusion

Smaller companies such as V-Mart or ixigo are, and will remain, the lifeblood of India’s economy and
can offer some of the most dynamic and rapid growth opportunities.

Investors, however, often get tunnel vision when it comes to investing in India, relying heavily on
ETFs and funds dominated by large-cap companies. They can be swayed by big names that are
comfortably established, which dominate these investment options.

This is perhaps to miss out on the wealth of thriving, dynamic and entrepreneurial smaller
companies, who are driving change and comprise a substantial part of the Alquity India Fund.

At Alquity, the team recognises that not every founder-led business prioritises long-term growth over short-term gains. This is why it seeks out companies with a strong entrepreneurial culture,
solid governance, and which are aligned with minority shareholders.

Alquity’s qualitative analysis and emphasis on the ‘G’ in ESG help the team to identify genuinely compelling long-term opportunities across India, a market we believe to be a exciting growth story.

For more information on the Alquity India Fund, contact your personal Relationship Manager Now.

Source: Alquity

¹ IMF, World Economic Outlook (April 2025)

² IMF, World Economic Outlook (April 2025)

³ GEM Global Report 2024/2025: Entrepreneurship Reality Check

⁴ India Ministry of MSME, YearEnd Review 2024

FOR PROFESSIONAL INVESTORS ONLY.

This is a marketing communication. Please refer to the Alquity prospectus and the funds’ KIIDs before making any final investment decisions.

Alquity Investment Management Limited is responsible for the co-ordination of distribution of the Alquity funds. VAM Marketing Limited, a wholly-owned subsidiary of Alquity UK Limited, is responsible for the distribution of this post on behalf of Alquity to inform and engage potential investors about the Fund.

This is not an offering memorandum or prospectus and does not constitute investment advice. This is a marketing communication that is intended for information purposes only. The content, including external data sources, is believed to be reliable but no assurances or warranties are given. The companies mentioned are shown for illustrative purposes only, do not constitute investment advice, and are not a recommendation to buy or sell any security.

Investments in emerging markets, including India, involve greater risks, including political, currency, and liquidity risks.

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