FIIs offloaded ₹10,956 crore in IT stocks during early February 2026 alone
The "SaaSpocalypse" fear suggests AI agents could replace traditional, human-led coding services
FII holdings hit a four-year low of ₹4.49 lakh crore, a 38% drop since 2025
Foreign institutional investors (FIIs) sold more than ₹10,956 crore worth of IT stocks in the first half of February, Moneycontrol reported.
The sell-off comes as the sector faces what analysts are calling a “SaaSpocalypse”, a sharp decline driven by concerns that advances in generative AI could reduce demand for large-scale, human-led coding and IT support services, which are major revenue sources for India’s software exporters.
3 February 2026
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FIIs have been reportedly selling IT stocks since the beginning of 2025, with total sales reaching nearly ₹74,698 crore so far.
As a result of this sustained selling, the total value of FII investments in IT stocks fell to ₹4.49 lakh crore as of February 15, the report stated citing data from National Securities Depository Limited.
This is the lowest level in four years and represents a 16% decline from ₹5.34 lakh crore at the end of January 2026. At the start of 2025, FII holdings in IT stocks had reached a record high of about ₹7.3 lakh crore. Since then, the combined value of their holdings has dropped 38% due to falling stock prices and continued selling.
IT Stocks Fall
Several major IT stocks have seen sharp declines this month.
Shares of Infosys have fallen 16.5%, while Tata Consultancy Services is down 14%, and HCL Technologies has dropped 14.2%. Tech Mahindra has declined 12%, while Persistent Systems and Wipro have each fallen around 10%. Overall, the Nifty IT Index has declined 14% so far in February.
The IT sector had already been experiencing a gradual decline, but the sell-off accelerated sharply in recent sessions.
This sharper fall was triggered by new developments from Anthropic, which released new plugins for its Claude Cowork AI agent tool. The launch raised concerns among investors about the long-term outlook for software and IT services companies.
The Trigger
Jeffrey Favuzza, an equity trader at Jefferies, described the situation as a “SaaSpocalypse,” according to Bloomberg.
He said investor sentiment has shifted to aggressive selling, reflecting fears about disruption, pricing pressure, and weaker future growth for software-as-a-service companies.
On January 30, 2026, Anthropic expanded the capabilities of its Claude Cowork AI agent by introducing 11 new plugins. These plugins allow users to combine tools, commands, and sub-agents, effectively turning Claude into a specialised assistant for specific roles, teams, or organisations.
According to Anthropic, these plugins are particularly useful for role-specific tasks such as sales, legal work, and financial analysis.
Soon after the launch, shares of software and IT companies declined sharply as investors reassessed the sector’s future prospects.
