Infosys Share Price Slips Over 3%, Nifty IT Declines Nearly 4% Amid Hike In H-1B Visa Fee- Know What Investors Should Do

IT stocks came under pressure on September 22. Shares of major domestic IT companies such as Infosys declined over 3 per cent in early trade to hit an intraday low at Rs 1482 apiece on the NSE. The decline in IT stocks followed an announcement by US President Donald Trump’s administration regarding an increase in the fees for H-1B Visas.

Nifty IT’s Nosedive

The Nifty IT slumped nearly 4 per cent in early trade following the announcement related to the fee hike. Notably the Nifty IT index slumped lower by 3.91 per cent to 35,145.1 levels. The declines came as both IT companies and investors reacted to the Trump administration’s decision to hike the H-1B visa application fee to $1,00,000.

The fee hike is expected to lead to a significant increase in the overall costs for immigration as the fee previously ranged between $1,700 to $4,500 as per a report by CBS news. Thus the increased fee is also likely to increase operational costs for Indian IT firms which have to secure H-1B visas for their US operations. The fee hike is also expected to result in margin pressures for Indian IT firms due to reliance on H-1B dependent workforces. Companies in the IT space are also likely to re-consider or re-align their business model to mitigate the effect of the fee hike. On the investor front, the change has led to uncertainty and increased complexity within the IT space which has already been battered by weak global demand and fears regarding the use of AI affecting employment and business operations.

Bhavik Joshi, Business Head at INVasset PMS told Outlook Money that the declines seen in the IT space followed a hike in the H1-B visa fee along with several other factors such as reduced client spending in key geographies and competition from the adoption of AI.

“The recent H-1B visa fee increase has raised costs for Indian IT firms, limiting their ability to deploy talent onsite, a key part of their business model. However, this is only one factor in a broader set of challenges driving the sector’s decline, as seen in the Nifty IT index’s significant drop over the past year. Reduced client spending in North America and Europe, driven by inflation and high interest rates and advancements in AI and automation are disrupting traditional IT services,” Joshi said.

Shares of Tech Mahindra, Mphasis and Persistent led the losers among Nifty IT stocks. Tech Mahindra share price fell over 6 per cent to an early low of Rs 1453.3 apiece on the NSE. Shares of other major losers among the Nifty IT pack such as MPhasis and Persistent traded lower by 3.5 per cent and 3.6 per cent respectively on the NSE. Shares of LTI Mindtree and Coforge also fell 3.48 per cent and 3.3 per cent respectively.

At the time of writing the top constituents of the Nifty IT index in terms of weightage such as Infosys, Tata Consultancy Services, HCL Technologies Ltd, Tech Mahindra and Wipro were trading in the red. Infosys shares traded lower by 1.95 per cent on the NSE, Tata Consultancy Services (TCS) share price declined over 2.13 per cent on the NSE. HCL Technologies Ltd shares traded at Rs 1,440.6 apiece down by 1.83 per cent on the NSE. Notably, all ten constituents of the Nifty IT index traded in the red at the time of writing.

What Should Investors Do?

Joshi added that short-term issues like higher visa costs and slow client orders are real. However investors should focus on the advantages big companies have in terms of size and skill. He advised existing investors in old-school IT enabled services companies to diversify by focusing on purchasing shares of companies which are engaged in cybersecurity, AI and other emerging verticals.

“Spreading out your investments is key. If you have too much in old-school IT service companies, shift to tougher areas like cybersecurity, cloud services, and AI data tools,” Joshi said.

Joshi also advised investors looking at fresh opportunities in the IT space to trade with caution and deploy a step-by-step approach. He advised investors to wait for signs of recovery, like stronger deal wins in Q4 reports or easing inflation in key markets like the US and Europe.

"New investors eyeing Indian IT stocks during this downturn should blend caution with selective action, avoiding both complete avoidance and hasty moves. We see the sector’s low valuations—below historical averages—as a potential opportunity. Yet, uncertainty around policy changes and client spending requires a careful, step-by-step approach rather than jumping in fully. A smart starting point is to wait for signs of recovery, like stronger deal wins in Q4 reports or easing inflation in key markets like the US and Europe. Smart investors stay watchful yet forward-thinking, building positions carefully for future growth,” Joshi said.