IT Stocks Under Pressure: Rs 87,000 crore mcap wiped out — What triggered fall?

Indian IT stocks witnessed a sharp decline in market capitalisation on Tuesday as selling pressure weighed on major technology counters.

The combined market capitalisation erosion across these IT stocks stood at around Rs 87,300 crore.

Stock-wise mcap erosion across IT pack

Mphasis fell 2.31 per cent, resulting in a market cap erosion of about Rs 971 crore. Oracle Financial Services Software (OFSS) declined 2.59 per cent, wiping out nearly Rs 2,083 crore in market value.

Infosys slipped 3.17 per cent, leading to a loss of around Rs 15,136 crore in market capitalisation. Wipro fell 3.24 per cent, eroding about Rs 6,688 crore from its market value.

Coforge declined 3.73 per cent, with a market cap erosion of nearly Rs 1,722 crore. Tata Consultancy Services (TCS) dropped 3.74 per cent, leading to the highest single-stock erosion of about Rs 32,362 crore.

Persistent Systems fell 4.00 per cent, wiping out around Rs 3,216 crore in market value. HCL Technologies declined 4.01 per cent, resulting in an erosion of about Rs 13,003 crore.

Tech Mahindra slipped 4.21 per cent, leading to a loss of nearly Rs 6,012 crore in market capitalisation. LTIMindtree fell 4.76 per cent, eroding about Rs 6,143 crore.

Analyst's view on IT sector fall

Fundamental Analyst Shashwat Singh of Bajaj Broking said IT stocks faced a sharp correction following OpenAI’s announcement of “The Deployment Company”, a new business unit aimed at enterprise AI implementation.

He said the acquisition of Tomoro and the use of “Forward Deployed Engineers” reflect a shift towards workflow redesign and organisational transformation.

He added that this marks a transition where AI firms are moving from providing tools to offering end-to-end services, which is creating pressure on traditional billable-hour-based IT models.

He said this is being seen as a structural challenge for the global IT services industry. He further noted that the market reaction was sharper for India’s service-based IT companies as investors fear displacement by AI-led firms capable of direct deployment and automation.

He said concerns over the long-term sustainability of the offshore IT model have increased amid rising geopolitical tensions and weakening global risk appetite.

He added that the combination of technological disruption and macroeconomic uncertainty has led to a broad-based sell-off in IT stocks.

Nifty IT index performance

Meanwhile, the Nifty IT index declined on Tuesday, falling 3.73 per cent to close at 28,234.90 points, down 1,094.55 points from its previous close of 29,329.45, according to data as on May 12, 2026.

The index opened lower at 29,091.05 and moved in a range between the intraday low of 28,126.90 and the day’s high of 29,091.05. The total traded volume stood at 630.34 lakh shares, while the value of traded shares was Rs 6,109.39 crore.

The index is now near its 52-week low of 28,126.90, while its 52-week high stands at 40,301.40. In the short term, Nifty IT has fallen 3.00 per cent in one week and 9.01 per cent in one month. It is down 14.85 per cent in three months and 23.39 per cent in six months.

On a year-to-date basis, the index is down 26.03 per cent, while it has declined 26.25 per cent over the last year.