New Delhi, May 26 -- Private equity firm India SME Investments, which focuses on small and medium enterprises, has partly monetized its investment in a fashion retailer that it first backed seven years ago, VCCircle has gathered.

The Mumbai-based PE firm, which is currently investing out of its second fund that it closed in 2025, has sold part of its stake in Gurugram-headquartered Citykart to Oister Global through a secondary transaction.

The partial exit generated a 10x multiple on its invested capital for India SME, VCCircle has learnt. The actual exit amount couldn't be ascertained.

The transaction comes about a year after the PE firm reduced its shareholding in Citykart as part of a larger Series B round that involved TPG NewQuest, the secondaries-focused arm of the American investor, and Indian growth-stage investor A91 Partners in May 2025. The total size of that transaction was Rs 538 crore, comprising a fresh infusion of Rs 120 crore and a secondary component of Rs 418 crore. The secondary deals involved India SME making a partial exit and Bahrain-based Investcorp making a full exit.

The Indian PE firm generated a returns multiple of about 4x on that partial exit, VCCircle has learnt. Both exit moves helped the PE firm log an internal rate of return (IRR) of about 31%, beating the minimum 20% IRR that private market investors typically chase in rupee terms at the fund level.

Citykart, founded in 2015 by Sudhanshu Agarwal and Rohit Agarwal, offers clothing for men, women, and kids, along with footwear, accessories, home furnishings, general merchandise, toys, and utility items. The company launched its first store in Lucknow in 2016 and now has 170 stores across 91 Tier 2 and Tier 3 cities in 11 states.

India SME invested in Citykart in 2019 from its first fund, acquiring a 10% stake for Rs 30 crore. The retailer has grown at a brisk pace since then.

In 2024-25, Citykart Stores Pvt Ltd-the group entity that operates the retail outlets-clocked revenue from operations of Rs 863.26 crore and an EBITDA of Rs 124 crore, according to VCCEdge. This compares with revenue of Rs 31.8 crore and EBITDA of Rs 1.35 crore for FY19.

Citykart Stores is almost fully owned by Citykart Ventures Pvt Ltd, the holding company which receives external investments from PE firms such as India SME.

India SME's portfolio

India SME Investments backs early-growth SMEs primarily in tier II and III cities. The sector-agnostic PE firm has exposure across consumer, retail, manufacturing and healthcare sectors.

The PE firm's debut fund, raised in 2019, mopped up around Rs 312 crore and invested in 14 companies, including Citykart.

With the latest partial exit, India SME has achieved close to 1x distribution to paid-in capital for its first fund. It still holds 11 companies in the fund's portfolio. The fund has fully exited three companies-Venus Pipes, DCX Systems and Priniti Foods-and partially exited Citykart and jewellery retailer Kushal's.

The PE firm raised Rs 1,400 crore for its second fund that it closed last year. It has made nine investments from the fund so far. These include streetwear clothing brand Bonkers Corner, biometric solutions provider Mantra Softech, smart-card manufacturer Manipal Payment and Identity Solutions, contract development and manufacturing organization Pontika Aerotech, and medical devices company Integris Health.

Published by HT Digital Content Services with permission from VC Circle.