The industry first entered the Nifty 50 in the second half of 1998 with Infosys and NIIT. Currently, five IT services companies are part of the index, led by Infosys with a 3.97 per cent weighting, followed by TCS at 2.27 per cent. With this decline, the IT sector has slipped behind the oil and gas sector, which includes Reliance Industries, to become the third-largest sector in the index. The oil and gas sector now accounts for 9.2 per cent of the index, down from 9.8 per cent at the end of March last year.
This marks the first time in six years that the IT sector will no longer be the second-largest contributor to the benchmark index. The banking, financial services and insurance (BFSI) sector continues to dominate, with a 36.5 per cent weighting in the Nifty 50, up from 35.6 per cent at the end of March last year.
The sharp fall in IT sector weighting in the current financial year (2025-26) largely reflects underperformance relative to the broader market. The Nifty IT index, which tracks the free-float market capitalisation of the country’s 10 largest listed IT companies, is down 11.4 per cent since the end of March last year, compared with an 8.3 per cent rise in the Nifty 50 over the same period. Similarly, the Nifty IT index is down 13.7 per cent since the start of the calendar year, compared with a 2.5 per cent decline in the Nifty 50.
The Nifty IT index is now nearly 26 per cent below its all-time month-end high of 43,338 at the end of December 2024, while the Nifty 50 is down just 2.8 per cent from its record high of 26,203 in November 2025. On Friday, the IT Index closed at 32,681, down 1.44 per cent for the day, while the Nifty 50 ended at 25,478.9, down 1.3 per cent. Following the recent selloff, IT companies have surrendered all the excess returns delivered to shareholders after the pandemic boom.
