₹85,400 crore wiped out from the Indian stock market in a single day and if you’re invested in Nifty IT or popular IT stocks, chances are your portfolio got hit too.
Shares of IT giants like TCS, Infosys, Wipro, and Tech Mahindra all slipped 2-3%, while mid-cap IT firms like Coforge, Mphasis, and LTIMindtree fell 4-5%.
So, why are these stocks nose-diving? Let’s understand and know what experts are advising the shareholders.
The trigger: Trump’s H-1B fee hike
The biggest reason behind the sell of is Trump’s surprise H-1B visa fee hike. The new rules raise the cost of an H-1B employee in the US by almost $90,000 per head annually.
For Indian IT majors, this change squeezes operating margins. Analysts estimate a 3-4% hit to profits in the near to medium term.
The mid-cap firms appear more exposed, as they tend to have fewer resources to absorb sudden cost escalations.
Expert opinion: Impact may be limited
On the surface, the headline numbers sound alarming. But here’s why many industry experts and trade body NASSCOM are deeming the impact marginal:
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Lower visa dependence: Indian IT companies have steadily reduced their reliance on H-1B visas over the past decade.
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Smaller workforce exposure: Only about 20% of employees in these firms work onsite with US clients. Out of those, only 20-30% are working in H-1B visas, implying just 3–5% of the total workforce is directly affected.
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Localization push: Indian IT companies have increased their focus on hiring local talent in the US, setting up training centers, and doubling down on offshoring.
Should investors buy the dip or exit?
This is the million-rupee question for investors staring at red screens. Here’s what brokerages and experts are suggesting.
- A sharp correction in large-cap IT companies like TCS, Wipro, Infosys etc. could actually be a good long-term buying opportunity, especially for investors with a long-term horizon. Large caps are better at managing cost headwinds and have diversified shareholder bases.
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Mid-Cap IT such as Mphasis, Coforge, LTIMindtree are more vulnerable in the near term as they might not absorb the visa shock as well as the biggies. Investors should exercise caution and closely monitor their exposure and adjust if needed.
Yes, the fee hike is an issue that came as bad news for an already down Indian IT sector. But efforts to reduce dependency on H-1B visa and increased localization can help them offset the cost. Investors should too diversify their portfolio to prevent any sudden impact.
