Value fashion retailer Citykart raises Rs 538 crore in a Series B funding round

Citykart, a value fashion retailer operating across India’s tier-II and tier-III towns, has raised Rs 538 crore in a new funding round led by TPG NewQuest and A91 Partners. The round, a mix of Rs 120 crore in primary capital and Rs 418 crore in secondary transactions, pushes the Gurgaon-based retailer’s valuation reportedly close to Rs 1,400 crore.

The fresh capital will support Citykart’s expansion into underserved states like Rajasthan, Jharkhand, Odisha, and Assam, as it attempts to replicate its success in its core markets of Uttar Pradesh and Bihar. The company currently runs 137 stores and plans to add 40–50 outlets annually.

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.

Investcorp's full exit

Bahrain-based Investcorp, which had acquired IDFC Alternatives' private equity assets in 2019, has made a full exit in this round, reportedly generating a fourfold return on its six-year-old investment. India SME Investments, another early backer, has sold half its stake. As a result, TPG NewQuest has emerged as the largest institutional investor in Citykart, followed by A91 Partners and India SME.

Citykart’s topline has grown by 70% over the past two years and is projected to cross Rs 1,300 crore in revenue in FY26, up from over Rs 900 crore in FY25.

Agarwal told the Economic Times that the company has remained profitable for five consecutive years. Despite the growth, Citykart’s valuation multiple of 1.5 times its FY25 revenue remains modest compared to listed peers. For instance, VMart trades at 2x revenue, while Vishal Mega Mart — with a more diversified product mix including groceries — commands a valuation of 5.4x.

Agarwal said Citykart could unlock higher valuations post an IPO but ruled out immediate plans to go public. “IPO is on the cards but, for us, it’s not a milestone that we want to achieve immediately,” he told the publication. “We want to double down on our revenue growth and profitability before thinking about an IPO.” 

The company is focusing on fashion for Bharat through a store-first strategy built around in-house brands like Athiya, Nimes, Fumee, and Remise. Agarwal believes that in small-town India, organised value retail is rapidly displacing the unorganised sector as incomes rise.

“With a 10% increase in income levels, the disposable income rises by 50%,” he said, underlining the opportunity for affordable fashion. 

He added that the new investors are expected to benefit either through sustained business growth or future public market listing.

“Citykart has demonstrated an exceptional ability to scale profitably in one of the most challenging and underserved segments of Indian retail. Their deep customer understanding, disciplined execution, and strong leadership team make them well-positioned to drive value fashion retail across India. We are excited to partner with them in this next phase of growth,” said Bharati Agarwal of TPG NewQuest.

Citykart’s latest round marks one of the largest private equity infusions in India’s value retail space, as firms double down on domestic consumption stories outside the metros. EY India advised the transaction.