Ctrl + Alt + Decline: Nifty IT gets sobering tech check

Summary: After a stellar rally, the Nifty IT index is facing a sharp correction—down 16.7 per cent this year—dragged by stretched valuations and weakening global demand. This piece unpacks what’s hurting India’s tech majors, the risks of concentration in the index and why investors must prepare for dry spells, even in sectors with strong long-term fundamentals. The Nifty IT index, home to India’s software heavyweights, serves as a barometer for the country’s tech landscape. The sector, which contributes around 7–8 per cent to India’s GDP, has had a rough year, emerging as one of the weakest performers in the market. The index itself is a compact leaderboard, tracking just 10 NSE-listed stocks that represent India’s software story. Their influence is determined by free-float market capitalisation. And within this select pack, a handful of names dominate. In fact, just two stocks, TCS and Infosys, account for more than half of the index. That’s concentration at its sharpest, with the duo steering a major portion of the portfolio. Throw in HCL Technologies, and the top three alone command nearly 62 per cent of the index. Current woes The Nifty IT TRI has been hit hard this year, slipping 16.7 per cent as of August 28, 2025. In contrast, the broader Nifty 500 TRI has managed to stay afloat, posting a modest 1.1 per cent gain over the same perio