IT stocks dive as Trump brings in H-1B bill

Shares of Indian information technology (IT) stocks tumbled on Tuesday, after US President Donald Trump introduced the H-1B reform bill, a move that could significantly inflate the overseas hiring bills of these companies.

According to the reform bill, the stipulated salary of H-1B visa holders has been proposed to be hiked from $60,000 per annum, to $1,30,000 per annum.

HCL Technologies was the top loser among top-tier IT stocks on the NSE. The stock hit a low of Rs 787.10 in intra-day trades before finally ending down 4.23% (Rs 35.55) at Rs 804.70. Tech Mahindra was the next big loser. The stock, which hit an intra-day low of Rs 425.50, recovered significantly to end the day with a loss of 3.73% (Rs 17.60) at Rs 454. Infosys also recovered from the day’s lows of Rs 904.35, to close down 2.1% at Rs 929.40. Wipro closed down 1.15% (Rs 5.35) at Rs 460.40.

The S&P BSE Information Technology index fell 2.96% to 9,586.34. 55 out of the 58 constituents on the index ended in the negative zone. Accelya Kale Solutions, Sasken Communications and Infinite Computer Solutions were the only gainers, gaining between 0.4% and 2%.

According to reports, the US accounts for nearly 65% of all software exports from India; however, revenue generated by the companies through H-1B visa employees is much smaller. Around 15% of headcount is made up of H-1B visa employees. Kotak Securities in a recent report had stated that the average salary level for H-1 for TCS is $69,648 per annum for its employees.