The government has given the green light to one of India’s biggest ever-foreign direct investments. After a five-month wait, it’s given a conditional approval to the mega deal between Reliance Industries and oil giant BP. On Friday the cabinet committee on economic affairs cleared the sale of stakes in 21 out of the 23 RIL blocks in question. The remaining two blocks are still in locked in disputes and haven’t been cleared. Also, BP will have to produce bank and performance guarantees as per the production sharing contract. Back in February RIL agreed to sell BP 30% stakes in 23 of its oil and gas blocks. This included the flagship KG D6 field. RIL hopes boost production at that field using BP’s deep-water drilling technology.
Moving to corporate results, Wipro has reported weak earnings for the first quarter. India’s third biggest IT firm saw lukewarm or negative growth in key numbers and verticals. Net profit declined 3% to Rs 1,335 crore. And total revenue went up 3.1% to Rs8,564 crore. But revenue from the firm’s main IT business nudged up just 0.5% to $1.4 billion. Some of Wipro’s other businesses like the healthcare, transportation and retail operations declined on a quarter on quarter basis.
Staying with earnings, HDFC Bank’s has shot past most estimates despite the rise in interest rates and other economic pressures. A spike in fee income and robust demand for loans powered the bank’s numbers. Net profit for the first quarter rose 33.6% to Rs1,085 crore. The bank’s net interest income meanwhile rose 18.6% to 2,850. On the other hand, the crucial net interest margin dropped to 4.2% from 4.3% in the same period last year.
The fall in the margin was worst than most estimates. And earnings reports from other private lender during the week strengthened the trend. While both Kotak Mahindra Bank and Axis Bank reported a 27% rise in their net profit, they also saw a decline in margins. Kotak’s net interest margin fell to just 5% compared to 5.4% earlier. And Axis Bank’s dropped to 3.28% from 3.71%.
Switching to aviation, a restructuring of ownership at Delhi’s airport could mean passengers will have to shell out more money. The airport’s operator DIAL has created 11 joint ventures to run operations ranging from beverages to ground handling. But the Airports Authority of India says this will mean passengers and airlines will have to pay more as user development fees. It could also mean AAI will get less revenue as a result. The DIAL consortium is headed by GMR Infrastructure. It has to share 46% of its revenue with AAI.
In other news, US Secretary of State Hillary Clinton has called on India to change it nuclear liability laws to bring them in line with those in other countries. She also asked India to provide US firms more access to Indian markets. Clinton was on a three-day visit to India, during which she met top leaders in Delhi and also visited Chennai. While in Chennai she also called on India to take up a more proactive role in the Aisa-Pacific region.