**Investcorp Exits Citykart with Significant Returns After Funding Round**
Bahrain-based private equity firm Investcorp has successfully exited its investment in the value retail chain Citykart, achieving over four times its initial investment. Citykart recently secured approximately ₹538 crore in its Series B funding round, led by TPG NewQuest and A91 Partners, through a combination of direct investments and share sales. Investcorp originally invested ₹75 crore during Citykart’s seed round in 2019 and is now set to exit with an estimated ₹280-300 crore, as confirmed by Citykart’s co-founder Sudhanshu Agarwal.
The funding process was primarily aimed at providing a profitable exit for Investcorp’s investors. Agarwal noted that Citykart is already in a strong financial position, boasting a healthy balance sheet and profitability since its inception. While there may be potential for future debt financing, there are currently no immediate plans for additional capital raises.
The entry of TPG NewQuest, a secondary private equity platform for Asia, along with growth-stage investor A91 Partners, signifies a notable change in Citykart’s capital structure. Existing investor India SME Fund continues to maintain a minority stake in the company. Specific details regarding the valuation of the funding round have not been disclosed.
Of the ₹538 crore raised, approximately ₹120 crore will be allocated as primary capital to accelerate Citykart’s expansion efforts, including increasing its store count and diversifying into new product categories. Currently, Citykart operates around 137 stores and aims to add an additional 40-50 locations annually. The remaining funds will facilitate secondary transactions, where existing shareholders sell their stakes to new or existing investors without injecting new capital into the company.
Citykart plans to enhance its presence in existing markets while exploring opportunities in neighboring states. The company has already begun opening stores in regions such as Jharkhand, Orissa, and Chhattisgarh. Agarwal emphasized the dual strategy of strengthening their foothold in current areas while venturing into new territories.
In addition to apparel, Citykart is considering expanding into cosmetics, recognizing the growing demand in tier 2 and 3 markets. Agarwal stated, “Our focus has always been on identifying unorganized product lines and making them accessible through our stores. Cosmetics is one of several categories where we see significant potential for growth.”
For the fiscal year 2024, Citykart reported an operating income of ₹628 crore, up from ₹524 crore the previous year, and a profit of ₹11.94 crore, compared to ₹24 lakh in FY23. Looking ahead, the company anticipates revenue of ₹950 crore for FY25 and projects reaching approximately ₹1,300 crore in the current financial year.
**FAQ**
*What is Citykart’s expansion strategy following the recent funding?*
Citykart plans to increase its store count significantly, targeting 40-50 new locations annually, while also exploring new product categories like cosmetics to enhance its market presence.
