Value fashion player Citykart raises Rs 538 crore in Series B funding round
• Citykart raises Rs538 crore in Series B led by TPG NewQuest and A91 Partners, valuing the company near Rs 1,400 crore.
• Plans aggressive expansion in underserved states with 40–50 new stores annually, focusing on tier-II and tier-III towns.
• Achieved 70% revenue growth, profitable for five years, with Rs1,300 crore projected revenue in FY26; IPO planned for the future but not immediate.
Value fashion retailer Citykart, which operates in India's tier-II and tier-III cities, has raised Rs 538 crore in a fresh round led by TPG NewQuest and A91 Partners. The round, which included a combination of Rs 120 crore of primary capital and Rs 418 crore of secondary deals, takes the valuation of Gurgaon-based retailer reportedly to Rs 1,400 crore.
The new capital will fund Citykart's entry into underpenetrated states such as Rajasthan, Jharkhand, Odisha, and Assam, as it tries to leverage its success in its home markets of Uttar Pradesh and Bihar. Citykart operates 137 stores today and is looking to expand by opening 40–50 stores a year.
Founder and managing director Sudhanshu Agarwal said that a key priority is scaling profitably while testing new store formats in peri-urban regions of Delhi and Gurugram.
Bahrain-headquartered Investcorp, which had purchased IDFC Alternatives' private equity business in 2019, has fully exited in this round, reportedly with four times return on its six-year investment. India SME Investments, another early investor, has offloaded half of its holding. This means TPG NewQuest now stands out as the largest institutional player in Citykart, followed by A91 Partners and India SME.
Citykart's top line has increased by 70% in the last two years and is expected to exceed Rs 1,300 crore in revenue in FY26 from a figure of over Rs 900 crore in FY25.
Agarwal informed the Economic Times that the firm has been profitable in the last five years. Even with the expansion, Citykart's valuation multiple of 1.5 times FY25 revenue is still conservative relative to peers on the stock market. For example, VMart is trading at 2x revenue, while Vishal Mega Mart with a more diversified product base including groceries is priced at 5.4x.
Agarwal said Citykart may be able to tap into higher valuations after an IPO but kept out plans for an immediate IPO. "IPO is on the cards but, for us, it's not a milestone that we want to achieve immediately," he explained to the publication. "We want to double down on our revenue growth and profitability before considering an IPO."
The group is concentrating on Bharat fashion in the form of a store-first approach with in-house labels such as Athiya, Nimes, Fumee, and Remise. Agarwal is of the view that in small-city India, structured value retail is increasingly taking the place of the unstructured sector as incomes go up.
"With a 10% rise in income levels, the disposable income goes up by 50%," he said, highlighting the potential for value fashion.
He said that the new investors will either gain through long-term business growth or eventual public market listing.
"Citykart has shown a remarkable capacity to expand profitably within one of the toughest and most underserved parts of Indian retail. Their customer insights, disciplined execution, and experienced leadership team position them to drive value fashion retailing across India. We are pleased to invest in them during this next phase of growth," commented Bharati Agarwal of TPG NewQuest.
Citykart's new round is one of the largest private equity investments in India's value retail space as companies bet big on domestic consumption narratives beyond the metros. EY India advised the deal.
• Plans aggressive expansion in underserved states with 40–50 new stores annually, focusing on tier-II and tier-III towns.
• Achieved 70% revenue growth, profitable for five years, with Rs1,300 crore projected revenue in FY26; IPO planned for the future but not immediate.
Value fashion retailer Citykart, which operates in India's tier-II and tier-III cities, has raised Rs 538 crore in a fresh round led by TPG NewQuest and A91 Partners. The round, which included a combination of Rs 120 crore of primary capital and Rs 418 crore of secondary deals, takes the valuation of Gurgaon-based retailer reportedly to Rs 1,400 crore.
The new capital will fund Citykart's entry into underpenetrated states such as Rajasthan, Jharkhand, Odisha, and Assam, as it tries to leverage its success in its home markets of Uttar Pradesh and Bihar. Citykart operates 137 stores today and is looking to expand by opening 40–50 stores a year.
Founder and managing director Sudhanshu Agarwal said that a key priority is scaling profitably while testing new store formats in peri-urban regions of Delhi and Gurugram.
Bahrain-headquartered Investcorp, which had purchased IDFC Alternatives' private equity business in 2019, has fully exited in this round, reportedly with four times return on its six-year investment. India SME Investments, another early investor, has offloaded half of its holding. This means TPG NewQuest now stands out as the largest institutional player in Citykart, followed by A91 Partners and India SME.
Citykart's top line has increased by 70% in the last two years and is expected to exceed Rs 1,300 crore in revenue in FY26 from a figure of over Rs 900 crore in FY25.
Agarwal informed the Economic Times that the firm has been profitable in the last five years. Even with the expansion, Citykart's valuation multiple of 1.5 times FY25 revenue is still conservative relative to peers on the stock market. For example, VMart is trading at 2x revenue, while Vishal Mega Mart with a more diversified product base including groceries is priced at 5.4x.
Agarwal said Citykart may be able to tap into higher valuations after an IPO but kept out plans for an immediate IPO. "IPO is on the cards but, for us, it's not a milestone that we want to achieve immediately," he explained to the publication. "We want to double down on our revenue growth and profitability before considering an IPO."
The group is concentrating on Bharat fashion in the form of a store-first approach with in-house labels such as Athiya, Nimes, Fumee, and Remise. Agarwal is of the view that in small-city India, structured value retail is increasingly taking the place of the unstructured sector as incomes go up.
"With a 10% rise in income levels, the disposable income goes up by 50%," he said, highlighting the potential for value fashion.
He said that the new investors will either gain through long-term business growth or eventual public market listing.
"Citykart has shown a remarkable capacity to expand profitably within one of the toughest and most underserved parts of Indian retail. Their customer insights, disciplined execution, and experienced leadership team position them to drive value fashion retailing across India. We are pleased to invest in them during this next phase of growth," commented Bharati Agarwal of TPG NewQuest.
Citykart's new round is one of the largest private equity investments in India's value retail space as companies bet big on domestic consumption narratives beyond the metros. EY India advised the deal.
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