Infosys, TCS, Tech Mahindra, Wipro: IT shares fall for second day; here's why

IT stocks such as Infosys Ltd., Tata Consultancy Services (TCS), Wipro Ltd., HCL Tech Ltd., Tech Mahindra Ltd., and midcap peers such as Coforge, saw declines of up to 1% on Wednesday. The weakness in IT stocks followed the US government's latest changes to the H-1B visa selection process, which shifted from a random lottery to a weighted system favouring higher-skilled and higher-paid workers. According to market data, Coforge recorded a 1.1% drop, while other major IT firms registered losses between 0.5% and 1%, reflecting immediate investor concerns over the implications for their US operations.

The Department of Homeland Security's revised H-1B process, due to take effect from February 27, 2026, introduces a wage-based selection structure for the financial year 2027 cap. Under this system, Level IV wage beneficiaries receive the highest weightage, significantly boosting their odds of selection, whereas Level I, typically entry-level workers, receive no additional weight, lowering their chances.

A federal judge ruled the Trump administration's plan to raise the visa fee to $100,000 per application is lawful and can proceed. Nearly 70% of current H-1B visas are issued to wage Level I and II workers, raising concerns for Indian IT companies reliant on entry- and mid-level staff for US contracts.

Industry experts estimate a substantial margin impact on leading Indian IT firms as a result of these changes. The Nifty IT index trailed broader benchmarks, as investors weighed the cost and selection hurdles imposed by the revised US rules against the backdrop of existing revenue streams. Leading competitors in the sector remain Wipro, HCLTech, Tech Mahindra, and Coforge, all of whom face similar headwinds in the US market.