Indian mutual funds saw nearly ₹13,000 crore wiped out from their holdings in the country’s top ten IT companies after a sharp sell-off triggered by the U.S. government’s sudden move to increase H-1B visa application fees.
The executive order, signed by President Donald Trump, has unsettled investors who fear a direct hit on profitability and future hiring strategies of the sector.
As of September 19, mutual funds held shares worth ₹3.41 lakh crore across the ten biggest IT companies by market value. By market opening on September 22, this had slipped to ₹3.28 lakh crore.
Infosys accounted for the largest exposure at ₹1.27 lakh crore, followed by Tata Consultancy Services at ₹62,000 crore and HCL Tech at ₹35,850 crore. Other significant holdings included Coforge at ₹21,720 crore, Persistent Systems at ₹18,900 crore, Mphasis at ₹13,240 crore, Wipro at ₹11,600 crore, LTIMindtree at ₹8,189 crore and Oracle Financial Services at ₹4,348 crore.
The policy change, which raises the H-1B visa fee from about $1,000 to a staggering $100,000 per new application, represents a hundred-fold jump. While the process of sponsoring skilled workers remains intact, the costs are expected to reshape hiring economics and alter business models.
The immediate impact on margins is expected to be limited, but analysts caution that second-order effects, such as wage inflation in the domestic talent pool, could pressure profitability by up to 50 basis points.
On the other hand, companies are likely to counterbalance the hike through increased offshoring and price renegotiations, which could neutralise the effect over time.
Industry experts point out that top Indian IT players currently have only 1.2 to 4.1 percent of their workforce on H-1B visas, reducing the scale of disruption compared with earlier fears.
The consensus emerging among brokerages is that while the news rattled markets and pulled the Nifty IT index down by 3 percent, the long-term impact may not be as damaging.
Many believe that with this regulatory overhang now addressed, the sector could actually benefit from greater clarity, enabling firms to recalibrate their models with certainty.
The full financial implications of the new fee structure are expected to show up only in FY27, when petitions filed under the revised regime begin to affect cost structures in a material way.
Until then, investors are expected to closely track how IT majors adjust their strategies, whether through deeper reliance on offshore talent pools, higher local hiring in the United States or renegotiated client contracts to pass on a share of the additional costs.
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