Infosys, Wipro ADRs fall up to 4% after Donald Trump’s new H-1B visa orders

The US-listed shares or American Depository Receipts (ADRs) of Infosys Ltd. and Wipro Ltd. fell as much as 4% overnight after US President Donald Trump signed an executive order to restrict the entry into the US of certain H-1B visa holders.While the Infosys ADR fell 4%, the Wipro ADR was down 2% on Friday.

As per the new rules, there will be a $1,00,000 payment to accompany or supplement a H-1B petitions for new applications. The US state department could deny the application on account of non-payment.

The higher visa costs could effectively end the H-1B program in its current form as costs would end up becoming unsustainable.Although analysts believe that this will be a significant hurdle, but not an existential threat for Indian IT. It must be noted that there is no immediate impact or cost for the current H-1B holders who are already within the US.

North America is the most important market for Indian IT companies, with them deriving at least one-thirds to two-thirds of their revenue from that geography.

The India-listed shares of Infosys, TCS, Wipro, and their other largecap and Midcap peers will react to this development on Monday. The Nifty IT index had a good week, with stocks gaining between 1% to 3%.

(With Inputs From Reema Tendulkar.)