Tech Mahindra, TCS, LTIM: IT stocks take a knock amid H-1B visa updates; NIFTY IT index down 2.6%

Last seen, the NIFTY IT index was trading 2.56% lower at 35,640.55 levels. All 10 constituents were trading in the red. Tech Mahindra was the biggest loser (down 4%). The next on the list were Persistent Systems, LTIMindtree, and Coforge.

Infosys was down 2% at ₹1,510.20, while Tata Consultancy Services Ltd (TCS) was trading over 2% lower at ₹3,100.90. HCLTech was down nearly 2% at ₹1,442.

Currently, the H-1B visa fee ranges from about $2000 to $5000, depending on employer size and other costs. The visas are valid for three years and can be renewed for another three years.

The new move is going to significantly impact Indian technology workers who are hired by tech companies and others on H-1B visas.

Tata Consultancy Services (TCS), as per a PTI report, is the second-highest beneficiary with 5,505 approved H-1B visas in 2025, after Amazon (10,044 workers on H-1B visas), according to the US Citizenship and Immigration Services (USCIS). Other top beneficiaries include Microsoft (5,189), Meta (5,123), Apple (4,202), Google (4,181), Deloitte (2,353), Infosys (2,004), Wipro (1,523) and Tech Mahindra Americas (951).

In his proclamation, Trump said the H-1B visa programme was created to bring temporary workers into the US to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labour.

However, later, the US government clarified that the H-1B visa application fee hike applies only to new applicants and does not affect the existing visa holders or renewals.

While some IT industry experts noted that they foresee no immediate adverse impact over the next 6-12 months as the hike takes effect only in the upcoming application cycle, others cautioned that the delay notwithstanding, there will be a deferred impact requiring eventual reassessment of business strategies by the IT companies if the rule stays.

"For the next six months to one year, there'll be no impact because for last year, they (companies) already filed H-1B petitions, and the lottery system will operate.

"It's only for a petition filed for now... If you file a new petition, it takes six months to one year for it to come up," former Infosys CFO and industry veteran Mohandas Pai said.

Pai added, "So, there's no worry for the next six months to one year, and after that we will see what happens."

Sajai Singh, Partner at JSA Advocates and Solicitors, however, emphasised that while the immediate shock has muted slightly, which seems like a huge relief for now, it is just giving more time for the reality to set in.

"The clarifications tweak the applicability for new H-1B visa applicants, not the existing visa holders or renewals. This means the current H-1B holders can exit and re-enter the US freely without paying the fee, as the fee will apply to the upcoming H-1B lottery cycle.

"However, Indian IT companies that rely heavily on H-1B visas will still face significant cost increases, potentially disrupting business models and revenue streams," Singh said.

Eventually, all this will bring the focus back on hiring local talent in the US to reduce the dependence on H-1B visa holders, Singh said.

How IT stocks have performed

The NIFTY IT index has gained over 5.24% in the past 30 days but has slipped 5.4% in the past three months. The index has gained 1% over the past six months and nearly 13% in the past 12 months.