Indian IT stocks tumbled during the mid-afternoon trade session on Tuesday as the US government introduced a proposed visa reform bill in the US House of Representatives.
The bill spooked investors, as it seeks to “double the minimum wages” offered by the IT firms in the US.
The bill proposes to raise the minimum salary of a ‘H-1B’ visa holder to around $130,000 per annum from the present limit of $60,000 per year.
The S&P BSE IT index plunged by 302.71 points or 3.06 per cent (at 2.15 p.m.). IT majors such as Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra traded deep in the red.
“Every 10 per cent hike in H-1B can hurt earnings by nearly 10 to 12 per cent of IT companies,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
“HCL Tech, TCS are expected to be less impacted, but Infosys and Tech Mahindra will be more impacted.”
Shares of IT major TCS slumped by 4.25 per cent to Rs 2,235, followed by HCL Technologies 3.36 per cent to Rs 811.45, Infosys 2.36 per cent to Rs 926, and Wipro 2.11 per cent to Rs 454.85.
Tech Mahindra slipped by 4.40 per cent to Rs 450.95.