New Delhi: IT stocks plunged over 4 percent on Tuesday, knocking off more than Rs 33,000 crore in market valuation of top five firms, after a new H1-B Bill in the US set off concerns that it will adversely impact hiring plans of Indian technology firms.
TCS slumped by as much as 4.47 percent to settle at Rs 2,229.90 on BSE. Intra-day, the stock had hit a low of Rs 2,206.55.
Infosys lost 2.01 percent to close at Rs 905. During the day, it had fallen to a low of Rs 905.
Wipro came in at Rs 457.10, 1.62 percent lower than its previous close. It tumbled to Rs 445.55 at one point.
Tech Mahindra went down as much as 4.23 percent to close at Rs 451.75 and HCL Technologies declined 3.67 percent to Rs 808.85.
Taken together, these five saw an erosion of over Rs 33,000 crore in their market capitalization.
The BSE IT index, a benchmark of IT stocks, fell 2.96 percent to settle at 9,586.34.
In addition, Mastek dropped 3.68 percent, Mindtree 3.27 percent and Mphasis 3.34 percent.
According to experts, US president Donald Trump plans to overhaul work-visa programs that dampened investor mood.
A legislation has been introduced in the US House of Representatives which among other things calls for more than doubling the minimum salary of H-1B visa holders to USD 1,30,000, making it difficult for firms to use the program to replace American employees with foreign workers, including from India.
"Hike in H-1B visa cost will have significant impact on the financials... as Indian companies are major users of H-1B visa though they form very less part of the overall workforce (around 11-15 percent)," Angel Broking said in a report.
"Depending on the companies, they could easily witness around 60-70 percent rise in the salaries of the H-1B visa dependent workforce and hence have significant impact on the net profit of the companies," it added.
H1B is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields. The technology companies go for it to hire tens of thousands of employees each year.