Goldman Sachs, NEA invest $54 mn in Nova Medical Centers

The private equity arm of Goldman Sachs and American venture capital fund New Enterprise Associates (NEA) jointly invested about $54 million in an Indian healthcare firm, in a long-term bet on growing healthcare spending in the country.

The investment highlights the allure of the Indian healthcare sector despite the concerns that global buyout firms have about investing in India.

Returns on funds raised in dollars have shrunk with the rupee's tumble to record lows, compounding the effects of a weak stock market.

However, private equity investments in India's healthcare sector rose 2.5 times to $630 million in the first half of this year from $181 million during the same period last year, according to data from VCCircle.com, a private equity and M&A data provider.

Goldman Sachs will invest about $40 million in Nova Medical Centers, while NEA, which had previously invested in the company, will make an add-on investment of $14 million, the three companies said in a joint statement.

Goldman will become the largest shareholder of Nova with more than 26 percent of the company, according to a source with direct knowledge of the matter. The U.S. investment bank has done four deals in India since its Asia co-head of private equity, Ankur Sahu, relocated to Mumbai in early 2011.

The investment will be used to expand Nova's specialty surgery and fertility businesses, the companies said.

Goldman Sachs' private equity arm, which has invested more than $2 billion in India since 2006, is a leading investor in the global healthcare space with about $8 billion global exposure to the sector.