IT's middle order takes US hit; big cos hold ground

Shares of smaller IT companies reeled on Monday despite their reassurances about the H-1B visa impact, while their large-cap peers that remain tight-lipped closed with smaller losses, signalling market belief that the latter may navigate the crisis better.

- Jas Bardia & Varun Sood

Coforge Ltd, Mphasis Ltd, Persistent Systems Ltd, Firstsource Solutions Ltd, Cyient Ltd and Hexaware Technologies Ltd said they have reduced reliance on such visas over the years and continue to focus on local hiring. Their small-cap peers, Inventurus Knowledge Solutions Ltd and Sasken Technologies Ltd, also do not expect any material impact from visa restrictions.

Yet, seven of them fell 2.8% to 7%, with Hexaware leading the losses at 7.08%. Sasken bucked the trend to end 0.60% higher on the NSE.

On Friday, US President Donald Trump signed an executive order requiring companies to pay $100,000 annually for every foreign worker brought under the H-1B visa, up from about $1,000 at present. White House clarified on Sunday that this one-time fee will apply only for new visa applications, and not for existing H-1B visa holders. These permits allow highly skilled non-immigrants to work in the US on a temporary basis.

"Less than 5% of the overall workforce is on H-1B visas for both large- and mid-caps (IT firms) so there will not be much of a difference on the impact that each of these companies face," said Pramod Gubbi, founder of Marcellus Investment Managers.