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Goldman Invests in BPL Medical Unit

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Continuing with its investments overseas, the private equity arm of The Goldman Sachs Group Inc. (GS) came up with an investment of $20 million (INR1.1 billion) in Bangalore-based BPL Medical Technologies, a unit of Indian electronic products maker BPL Ltd., Reuters reported on Monday. Through this investment, Goldman acquired 49% stake in the medical unit.

BPL Medical primarily makes products such as ultrasound scanners and fetal dopplers which are used to read the heartbeat of a fetus. Through the funds invested by Goldman, the unit aims to expand geographically as well as push its medical device business into arenas such as imaging and neo-natal care.

Although global buyout firms have ongoing concerns about investing in India as returns have fallen due to rupee depreciation, the Indian healthcare sector is still attractive to private equity firms. In 2012, private equity and venture capital investments in India’s healthcare sector have surged rapidly to $1.2 billion across 48 deals, according to research firm Venture Intelligence.

Through this investment, Goldman targets to fund segments in the healthcare sector and tap the existing growth potential to the fullest. Moreover, this investment bank aims to share its leverage in global healthcare expertise and therefore, partnered with the medical unit of BPL group.

Goldman has vigorously invested in private equity in India. This is the second consecutive investment by the company this month and the third in the healthcare sector. In May, Goldman, holding a stake in South Korean cable television firm C&M Co. Ltd. and Japanese Internet service provider e-Access Ltd, endowed $110 million to Indian cable television distribution company – DEN Networks Ltd.

Previously, the company invested $115 million in Max India healthcare and $40 million in Nova Medical Centers. Since 2006, the firm put in more than $2 billion funds in India. On the international level, it has come up with an investment of approximately $8 billion in the healthcare sector, spread over more than 30 companies.

Therefore, yielding returns on such investments will accelerate Goldman’s profitability and boost investors’ confidence. Goldman currently carries a Zacks Rank #2 (Buy). Other well performing banks include JPMorgan Chase & Co. (JPM), Fifth Third Bancorp (FITB) and State Street Corporation (STT), all of which carry the same rank.

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