IT stocks faced significant selling pressure on Monday, resulting in declines for broader market indices, following an announcement from the US administration to increase the one-time fee for new H-1B visa applications to $100,000. This change raised concerns among investors.
The Nifty IT index plummeted nearly 3 percent, marking its most substantial single-day decline in recent weeks. By 10:23 am, the index was down 2.5 percent, settling at 35,651.25.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, indicated that the market may exhibit dual behavior, with the IT sector adversely affected by the H-1B visa fee hike, while domestic consumption likely benefits from lower GST rates implemented from the same day.
Market analysts pointed out that larger firms might mitigate the additional expenses through increased local hiring and enhanced offshore delivery. However, mid-tier companies could experience a tighter financial squeeze. The situation is compounded by foreign portfolio investors, who turned net sellers in the IT market throughout September, exacerbating the downward trend.
Nuvama Institutional Equities assessed that the elevated H-1B fees would have a limited effect on Indian IT firms, suggesting that these companies could offset the impacts by ramping up nearshoring and hiring local talent.
Major IT companies such as Tech Mahindra, Infosys, TCS, Wipro, and HCL Technologies saw their share prices drop between 3 and 6 percent during early trading, contributing to their status as significant laggards within the Nifty 50 index.
This sectoral decline negatively influenced the overall market, with benchmark indices also declining. The Sensex fell by 475 points but was later seen trading down by 94.64 points or 0.11 percent at 82,531.59 as of 10:33 am. Meanwhile, Nifty 50 dipped by 6.65 points or 0.03 percent, reaching 25,320.40. The sectoral performance remained mixed, with marginal gains in real estate, banking, metals, and oil & gas, while the IT index continued to lead the losses.
In response to the visa fee news, Coforge reported to stock exchanges that the US accounted for 53 percent of its revenue in FY25, and the company had 34,187 employees as of June 30, 2025. It noted that in FY25, it submitted only 65 new H-1B visa petitions, of which 63 were approved, underscoring a deliberate strategy to reduce reliance on H-1B petitions for staffing.
Mphasis indicated that it does not expect major financial or operational impacts due to its low H-1B filing volume and the limited number of employees on such visas in the US. Similarly, Persistent Systems stated that they foresee no significant repercussions from the executive order affecting H-1B applications on their operations or financial matters.
Firstsource emphasized its absence of dependency on the H-1B program, highlighting its talent strategy based on local hiring and a globally distributed operational model, which ensures resilience regardless of immigration legislation.
By the recent reports’ conclusion, Mphasis, Persistent Systems, Coforge, Tech Mahindra, and LTIMindree had all experienced declines close to 4 percent, with no gainers reported within the Nifty IT index at that time.
