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A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, India, February 26, 2016.Reuters file

Shares of IT companies Infosys, TCS, Wipro and HCL Technologies fell sharply on Wednesday after Pravin Rao, COO of Infosys, said that clients are likely to cut their IT spend this year.

At around 2.10 pm, TCS was down 3.78 percent to Rs 2,593, Wipro was trading 2.91 percent lower at Rs 544, Infosys was down 2.97 percent to Rs 950 and Tech Mahindra was trading at Rs 397, 2.83 percent lower to its Tuesday closing. 

The BSE Sensex was trading almost flat at 31,205.

Rao had told a business news channel that clients are looking at cutting costs, something that would dent revenues for India's $150-billion IT industry. 

"They (the clients) are taking cost-take-out initiatives in most organisations from what is known as run-the-business. Typically, run-the-business is 70 percent of spends and now there is an urgent pressure to take costs out of this to 50 percent of spends and repurpose that towards new technologies and transformation," he told CNBC-TV18.

"At the same time, the pace of reinvestment is happening at a much slower pace compared to the cost-take-out," he added.

The RBI's Monetary Policy Committee is yet to announce its statement.

India's mutual fund (MF) industry saw its asset base fall 1.5 percent in May to Rs 19.03 lakh crore, from Rs 19.26 lakh crore the previous month, according to industry body Amfi.

There are 42 MF houses in India, the top three being ICICI MF, HDFC MF and Reliance MF.