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Value fashion retailer Citykart has raised Rs 538 crore in a Series B funding round, marking one of the largest investments in the country’s budget apparel segment to date.
The funding round was led by TPG NewQuest, the Asia-focused secondary private equity arm of TPG, and A91 Partners, a domestic growth-stage investment firm.
The funding marks a change in Citykart’s investor lineup. Investcorp, one of the early investors, has completely exited, while India SME Fund still holds a small stake. EY India was the sole financial advisor for the deal.
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Out of the total funds raised, Rs 120 crore is fresh capital that will help Citykart grow beyond its main markets in tier-II and tier-III cities of Uttar Pradesh and Bihar.
Citykart, which now runs 137 stores, plans to open 40 to 50 new ones each year in states like Rajasthan, Assam, Odisha, and Jharkhand.
Bahrain’s Investcorp, a major asset manager from the Middle East, has made four times its money from its 2019 investment in Citykart.
Earlier, IDFC Alternatives and India SME Investments had jointly invested ₹100 crore in the company. In 2019, Investcorp took over IDFC Alternatives’ private equity and real estate funds.
With the latest funding, TPG NewQuest, a private equity fund focused on secondary deals, is now the biggest institutional investor in Citykart, followed by A91 Partners and India SME.
Founder and MD Sudhanshu Agarwal said the company could have gained more value by going public, but added that listing on the stock market isn’t a priority right now.
“IPO is on the cards but, for us, it’s not a milestone that we want to achieve immediately... We want to double down on our revenue growth and profitability before thinking about an IPO,” he said.
Citykart is testing new store formats in rural areas of Delhi and Gurgaon, where the customer base is similar to its existing markets. Agarwal said the company wants to see if there's a chance to grow in bigger cities.
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