Why investors may want to consider India?
The mantra is always ‘it’s not about timing the market, it’s about time in the market’. And for good reason. Less experienced investors can be swept up in the noise and end up investing in a company or strategy closer to its peak than a trough.
There are, however, periods when an investment case is particularly strengthened. We would argue that the current structural and economic backdrop supports a long-term investment case for Indian equities.
A structural growth advantage
India’s population profile points to sustained economic expansion. Now the most populous country in the world, the median age in India is 28.4 years compared with China’s 38.4 years[1].
India’s youth is the engine behind its multi-decade growth trajectory, which is being driven by rising consumption, urbanisation and digitalisation.
This is reflected in its GDP growth, which rose 9.2% in 2023, 6.5% in 2024 and is forecast to hit 6.6% in 2025, according to the International Monetary Fund (IMF). Compare this with developed markets such as the US and the EU, which are on course to deliver 2% and 1.4% next year, respectively[2].
Tailwinds and momentum
Several tailwinds emerged during 2025, including the Reserve Bank of India (RBI) cutting interest rates by 125bps to 5.25%. Cuts were also made to income tax and the goods and services (GST) tax[3], and inflation reached a multi-year low (0.25% in October, year on year).
S&P upgraded India’s sovereign credit rating to BBB in August 2025, marking the country’s first upgrade since 2007[4].
Third quarter GDP growth emphatically beat expectations, delivering 8.2% ahead of the predicted 7-7.5%. It follows stronger than anticipated growth of 7.8% in Q2 and 7.4% in Q1[5], putting the economy on course to exceed the IMF’s 6.6% forecast for 2025.
In a further development, long awaited labour laws were enacted in late November reducing 29 federal laws to just four simplified codes. As a result, instead of 1,400 labour governance rules, companies will now only need to comply with around 350. The regulatory burden on businesses has also been lightened, with the number of forms companies are required to complete reduced to 73 from 180[6].
Additionally, India’s historical valuation premium has narrowed significantly compared with other emerging markets, which creates a more attractive entry point[7].
The Indian stock market has had a challenging run in 2025[8]. Companies saw earnings downgrades; despite the economy being well-insulated from Trump’s tariffs due to the US representing such a small percentage of total Indian exports[9].
But sentiment is improving. The government’s reformist zeal has returned, the earnings downgrade period is over and the rhetoric around tariffs has softened. As a result, expectations are rising ahead of 2026[10].
Out of index opportunities
India’s equity universe is one of the broadest and most diverse. Its two primary stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), collectively host around 7,700 companies[11]. Yet the most widely tracked indices represent a fraction of this opportunity. The narrower indices cover <0.4% and the broader benchmarks <6.5% of listed names.
This creates significant scope for active managers to uncover mispriced securities that currently sit outside of the indices.
Indian equities also exhibit low correlation when compared with global indices, such as the S&P 500 (0.18) and MSCI World (0.30)[12]. The benefit this offers investors is lower overall portfolio volatility when combined with developed market exposures.
In short, we believe India combines scale, diversity and inefficiency, making it one of the most compelling markets, globally, for active stock selection.
How Alquity India is positioned to capture this opportunity
An experienced team: Our investment team has worked together for six years. It is led by Mike Sell, who has 30 years’ experience of investing in India.
Distinct portfolio construction: We focus on structural themes, such as digitalisation and domestic consumption. Approximately, half of our holdings sit outside the main index, as our team targets under-researched small and mid-cap companies as a differentiated source of alpha.
Governance: Our team seeks companies with high governance standards, and we avoid sectors that have demonstrated misalignment with minority shareholders[13].
Proven track record: Over 10 years, the Fund (I share class, USD) has delivered a 150.5% cumulative return, ranking in the 1st quartile and 14th percentile within the Lipper Global Equity India peer group, outperforming 86% of comparable funds. The Fund exceeded the India Index (+145.4%), the peer group average (+140.8%), and significantly outpaced major ETF alternatives such, as the India iShares ETF (+113.0%)[14], whose returns reflect the provisioning for capital gains tax – a drag not applied to the index but accrued by the Alquity India Fund.
[1] Source: United Nations, January 2023
[2] Source: IMF, October 2024
[3] Source: RBI, Bloomberg, October 2025
[4] Source: S&P Global, August 2025
[5] Source: Financial Times, November 2025
[6] Source: BBC, November 2025
[7] Source: Bloomberg, October 2025
[8] Source: Bloomberg,
[9] Source, Bloomberg, November 2025
[10] Source, Bloomberg, November 2025
[11] Source: NSE and BSE
[12] Source: Bloomberg, September 2025
[13] Source: Alquity, November 2025
[14] Source: Alquity, Bloomberg, Lipper, as of 31st October 2025.
The performance shown is based on the I class charging structure with an OCF of 1.0%. We have used the track record for the USD M class since 30th April 2014 and the USD Y class since 29th June 2017 and added back 1% per annum up until the launch of its GBP I class (12th November 2019) and converted to USD up until 13th August 2024 when the share class was launched. Actual results will vary from the analysis. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance. Currency exchange rate movements can lead to an increase or decrease in the value of the fund’s investments.
For professional investors only.
Source: Alquity
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.
Prospective investors should read and understand the terms of the Prospectus (including the risk factors) prior to purchasing units in any of the funds. There can be no assurance that the fund’s investment objectives will be achieved and investment results may vary substantially over time. We do not provide financial, tax or legal advice and we recommend that you obtain your own independent advice tailored to your individual circumstances prior to investing. Prospective investors should be aware that the value of investments can go down as well as up and past performance is not an indicator of future performance.
Investors should be aware that by investing in the fund, they risk losing all or part of the capital invested. The Alquity Asia Fund, Alquity Future World Fund, Alquity Indian Subcontinent Fund and Alquity Global Impact Fund are sub-funds of the Alquity SICAV (the “Fund”), which is a UCITS-compliant investment vehicle and a recognised collective investment scheme under the Financial Services and Markets Act 2000 (FSMA) in the United Kingdom.
The Alquity SICAV is an open-ended investment company managed by Limestone Platform incorporated under the laws of Luxembourg and authorised by the Commission de Surveillance du Secteur Financier (CSSF). The Fund is authorised under the UCITS Directive (Directive 2009/65/EC). Sub-funds may not be registered for distribution in all jurisdictions. Alquity Investment Management Limited acts as the investment manager to the SICAV.
This marketing communication is issued by Alquity Investment Management Limited (“AIML”) for distribution both within and outside the United Kingdom. AIML is incorporated in England and Wales (Company No. 07992381) and is authorised and regulated by the Financial Conduct Authority (FRN 463991). Its registered office is Audrey House, Ely Place, London, EC1N 6SN.
