New H1-B visa fees rule drags Nifty IT 4%; Tech M, LTIMindtree sink upto 6%

The BSE IT index also fell 3.5 per cent in the intraday trade. Thus far in calendar year 2025, the BSE IT index has underperformed the market by sliding 19 per cent

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Shares of information technology (IT) companies came under heavy selling pressure on Monday with the Nifty IT index plunging 4 per cent to 35,145.10 levels on the National Stock Exchange (NSE), in the intraday trade, after US President Donald Trump imposed a higher $100,000 fee for new H-1B visas as a one-time payment.

 

At 09:25 AM, Nifty IT index was the top loser among the sectoral indices on the NSE and was down 2.74 per cent at 35,574.65. By comparison, the Nifty50 was down 0.20 per cent.

 

The BSE IT index also traded lower by 2.5 per cent around the same time, after falling 3.5 per cent in the intraday trade. Thus far in calendar year 2025, the BSE IT index has underperformed the market by sliding 19 per cent as compared to a 5-per cent rally in the BSE Sensex.

 

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Among individual stocks, Tech Mahindra, Persistent Systems, LTIMindtree, Coforge, and Mphasis tumbled between 5 per cent and 6 per cent in the intraday trade. Tata Consultancy Services (TCS), Wipro, HCL Technologies, and Infosys shares, too, were down in the range of 3 per cent to 4 per cent on the Nifty IT index.

New H1-B visa fees impact on Indian IT companies

 

The Trump administration's executive order, imposing a $100,000 levy on every new H1B visa from September 21, initially shook Indian IT companies as Indians accounted for nearly 71 per cent of all H-1B holders in FY24, while 14,319 visas were sponsored by Indian IT firms in FY25. However, the White House has clarified that the levy applies only to initial petitions, not renewals, re-entries or existing holders, easing fears of a recurring or blanket cost burden.

 

Companies are, now, scrambling to assuage investor concerns. Mphasis, for instance, clarified that its net new visa applications in calendar year 2025 was 130,  of which it has received 78 new approvals till date.

 

Similarly, Coforge said that it filed only 65 new H-1B visa petitions in FY25, of which 63 were approved by USCI. BPO firm Firstsource, too, mentioned that it had zero-dependency on the H-1B program for its operations. 

 

"We do not foresee any significant impact on our financials or operations given our low H1B filing volume as well as the relative portion of our overall US employees that are on H1B visas," Mphasis said in an exchange filing.

 

It added: Our focus on AI-led deals has helped us build sufficient system resiliency. Over the years, we have been steadily reducing our reliance on visas through increased local hiring, acquisitions, and partnerships.

 

"With renewals and existing visa holders excluded, the financial impact for Indian IT service players will be largely deferred to new hires," said ICICI Securities expects a marginal near-term margin pressure of 50-100 bps for firms with heavier H-1B reliance. 

Notably, visa allocations for top firms have already fallen sharply between 2022 and 2025, reflecting lower dependence on the programme.

 

ICICI Securities said large IT players now deploy only 20–50 per cent of their US workforce via H-1Bs. "Thus, broadly, the effect is limited given the secular decline in H-1B usage and the accelerating shift to offshore/nearshore delivery," it said.

 

However, due to the near-term pressure on margins amid an already tough market, the brokerage firm believes this is sentimentally negative for the sector. However, over the medium term, Indian IT would largely neutralise the impact via higher local hiring, nearshoring, and offshoring.

 

Analysts at JM Financial Institutional Securities, meanwhile, estimate that the top-10 IT Services players have 1.2-4.1 per cent of their total employee base on H-1B.

 

"In a scenario of increased local hiring without offsets, we estimate that margin impact could be 15-50bps. In a more likely scenario of higher offshoring, the above impact could be completely negated. Financially, therefore, this is neutral, in our view," it said.

 

Importantly, with one of the biggest regulatory overhangs now behind, this event is net positive, in our view, analysts at the brokerage said.