IT stocks crashed on Monday after US President Donald Trump signed a proclamation that will raise the fee for H1-B visas to a whopping $100,000 annually, marking the latest move in his administration’s push to crack down on immigration.
Nifty IT fell over 3.5 percent in intra-day deals on Monday, September 22 as against half a percent decline in benchmark Nifty.
President Donald Trump has signed an executive order raising the H-1B visa application fee from USD 1,000 to USD 100,000 per applicant — a 100x increase that applies to new applications. MOSL, in a recent note, stated that while the program’s structure remains unchanged, the first significant impact will likely be seen in FY27 petitions, as FY26 applications are already locked in. The steep increase is expected to influence decisions around on-site staffing and visa filings for Indian IT companies.
IT stocks trade weak
All Nifty IT constituents were trading in the red on Monday. Tech Mahindra was the top loser, down 5.8 percent followed by Mphasis and Persistent Systems, which fell over 5 percent each. Meanwhile, TCS, Wipro, HCL Tech, Infosys, Coforge, and LTIMindtree also shed between 3-5 percent each and Oracle Financial Service lost 1.4 percent.
Implications for Indian IT Services
MOSL highlighted that Indian IT vendors have reduced their dependence on H-1B visas over the last decade, driven by US localization and increased local hiring. Currently, only about 20 percent of employees are on-site, of which 20–30 percent hold H-1B visas, translating to roughly 3–5 percent of a typical vendor’s active workforce. MOSL emphasized that this limited exposure provides some buffer against the new fee structure.
According to MOSL, Big Tech companies like Google, Amazon, Microsoft, and Meta account for a larger share of fresh H-1B applications than Indian IT firms. Indian IT vendors, with their built-in localization and subcontracting models, are relatively well-positioned to adjust. MOSL referenced its earlier report, Trump 2.0: What’s in Store for IT Services?, which discussed potential risks from immigration policies, corporate taxes, and trade tensions.
The brokerage illustrated that if an IT firm were to file 5,000 H-1B applications in FY27, the total fee would amount to USD 500 million. MOSL believes Indian IT companies are likely to reduce new filings, relying instead on offshore delivery and local recruitment. While this may reduce on-site revenue, MOSL noted that offshore work is more profitable, and operating margins could improve even as top-line growth moderates. The order is also expected to face legal challenges in US courts, which could modify its impact.
Valuation and Stock Picks
MOSL said IT sector valuations remain reasonable, but a sector-wide re-rating will depend on a new technology cycle and earnings upgrades. For large-cap exposure, MOSL prefers HCL Technologies and Tech Mahindra, highlighting TechM’s transformation under new leadership and improving execution in BFSI. HCLT is valued for its diversified, resilient portfolio. Among mid-caps, MOSL continues to favor Coforge and Hexaware, citing their strong performance in cost-focused market conditions.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
