Citykart, a value fashion retailer, has raised Rs 538 crore in a Series B funding round, marking one of the largest investments in India’s budget apparel sector to date.
The round was led by TPG NewQuest, the Asia-focused secondary investment arm of private equity giant TPG, and A91 Partners, a domestic growth-stage investor.
The deal reflects a shift in the investor structure, with Bahrain-based Investcorp making a complete exit, while India SME Fund retains a small stake. EY India acted as the sole financial advisor for the transaction.
Out of the total raised, Rs 120 crore is fresh capital, aimed at helping Citykart expand beyond its core markets in tier-II and tier-III cities of Uttar Pradesh and Bihar. The company currently operates 137 stores, with plans to open 40–50 new ones annually in states like Rajasthan, Assam, Odisha, and Jharkhand.
Investcorp reportedly made a 4x return on its 2019 investment. The firm had acquired IDFC Alternatives’ private equity and real estate funds, which had invested Rs 100 crore along with India SME Investments.
Following this round, TPG NewQuest becomes the largest institutional investor in Citykart, followed by A91 Partners and India SME.
Founder and MD Sudhanshu Agarwal said the company could have fetched a higher valuation through a public listing, but an IPO is not a current priority:
“IPO is on the cards but not something we want to chase right away… We want to double down on revenue growth and profitability first.”
Citykart is also experimenting with new store formats in rural Delhi and Gurgaon, to assess its potential in larger urban markets.
