H-1B Visa Fee Hike Triggers Heavy IT Sell-Off, Sector Loses ₹13,000 Crore in Market Value

Indian IT stocks came under heavy selling pressure on September 22 after U.S. President Donald Trump unveiled a sweeping overhaul of the H-1B visa programme. The executive order, which increases application fees from $1,000 to a steep $100,000 per applicant, has rattled investor sentiment and sparked concerns over profitability, hiring costs, and the growth outlook for technology majors.

The impact was immediately visible on Dalal Street, with the Nifty IT index falling nearly 3% in early trade. Large and mid-cap IT firms lost between 2–5%, dragging benchmark indices lower before a partial recovery. So far this year, the Nifty IT index has slipped aroud 18%, reflecting persistent headwinds.

IT Stocks Bear the Brunt

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Among the top losers on the Nifty 50 were Tech Mahindra, Wipro, Infosys, HCLTech and TCS, with Tech Mahindra stock price dropping nearly 4%. Even companies that publicly stated minimal exposure to H-1B visas, such as Firstsource Solutions and Persistent Systems, saw their shares decline over 1.5%, underscoring broad-based selling.

Persistent Systems, in a clarification, said the order would not significantly impact its financials or operations due to its distributed workforce model and local hiring strategies. Despite such reassurances, investors remained wary as uncertainty over costs loomed.

Brokerage Perspectives

Brokerages expressed mixed views on the development. JPMorgan warned that higher visa fees could raise wage costs and dent margins, with a potential 2–6% hit on FY27 earnings per share if firms opt to pay the additional cost. Citi noted that over 60% of Infosys’ and 80% of HCLTech’s U.S. businesses are independent of visa approvals, suggesting the real impact may only materialise from FY27.

Jefferies added that a shortage of skilled talent could escalate onsite wages, squeezing margins and slowing growth at a time when IT companies already face weak demand, margin pressures, and the growing influence of artificial intelligence.

Mutual Fund Exposure Hit

The sell-off also weighed on domestic institutional investors. Mutual fund holdings across the top 10 Indian IT companies shares fell by nearly ₹13,000 crore, slipping from ₹3.41 lakh crore on September 19 to ₹3.28 lakh crore by the market opening on September 22.

Infosys remains the largest holding at ₹1.27 lakh crore, followed by TCS at ₹62,000 crore and HCLTech at ₹35,850 crore. Other major exposures include Coforge, Persistent Systems, Mphasis, Wipro, LTIMindtree, and Oracle Financial Services.

JM Financial, however, struck a more balanced view, suggesting the direct impact may be “margin neutral” in the short run, with second-order effects such as wage inflation being offset by higher offshoring and renegotiated contracts. With just 1.2–4.1% of their workforce on H-1B visas, the firm argued, disruption may be limited.

Trade and Policy Backdrop

The announcement comes at a sensitive time, just days after Trump’s phone call with Prime Minister Narendra Modi reaffirming strategic ties. Analysts said the move could add strain to ongoing trade negotiations, with Commerce Minister Piyush Goyal scheduled to visit Washington this week for discussions.

Conclusion

The unprecedented H-1B visa fee hike has shaken confidence in India’s IT sector, wiping out ₹13,000 crore in mutual fund value in a single session. While long-term fundamentals remain intact due to the sector's strong offshoring capabilities, near-term risks, including higher costs, wage inflation, and policy uncertainty, are expected to keep the sector volatile.