12 February 2026 (Navroze Bureau) : The Indian equity market witnessed a major reshuffle among its most valuable companies as Tata Consultancy Services (TCS) slipped below the Rs 10 lakh crore market capitalisation mark for the first time since December 2020. The fall came amid an intensified sell-off in information technology (IT) stocks, which has been weighing heavily on the sector in recent sessions. As a result, ICICI Bank overtook TCS in market value, following State Bank of India (SBI), which had surpassed the IT major earlier.
The development marks a significant change in market leadership, highlighting a clear shift in investor preference away from IT stocks toward banking and financial services companies. For several years, TCS had remained one of India’s top-valued firms, supported by steady global demand for IT services, strong cash flows, and a resilient business model. However, current market conditions have tested that dominance.
TCS shares declined sharply during the session, touching their lowest levels in months. The fall dragged the company’s overall valuation below the psychologically important Rs 10 lakh crore threshold, a level it had comfortably maintained for more than three years despite global economic uncertainties. The breach of this mark has been seen by market participants as a symbol of the broader pressure facing the IT sector.
The sell-off in IT stocks has been driven by multiple factors. One of the key concerns is the uncertain outlook for global technology spending. Clients in major markets such as the United States and Europe have become more cautious with discretionary IT budgets, leading to slower deal closures and delays in new projects. This has raised concerns over revenue growth for large IT services exporters.
Another factor weighing on sentiment is the rapid rise of artificial intelligence and automation technologies. While these innovations offer long-term growth opportunities, they have also sparked fears that traditional, manpower-heavy IT services models could face disruption. Investors are increasingly questioning whether established IT companies will be able to protect margins and maintain growth in an environment where AI-driven tools are becoming more prevalent.
In addition to sector-specific concerns, global macroeconomic factors have also played a role. Strong economic data from the US has reduced expectations of early interest rate cuts by the Federal Reserve. Higher interest rates for a longer period tend to impact technology stocks more severely, as their valuations are often based on future earnings growth. This has added to selling pressure across global and domestic tech stocks.
While IT stocks struggled, banking stocks emerged as clear beneficiaries of the market rotation. ICICI Bank’s market capitalisation rose steadily, supported by strong investor confidence in the lender’s financial performance and outlook. The private sector bank has reported consistent growth in profits, stable asset quality, and healthy credit expansion, making it a preferred pick among investors.
State Bank of India, India’s largest lender, had already moved ahead of TCS in market value earlier in the week. SBI’s strong quarterly performance, improvement in asset quality, and optimism around sustained loan growth boosted its share price and market capitalisation. The combined rise of SBI and ICICI Bank underscores the renewed strength of the banking sector.
The outperformance of banks reflects broader confidence in India’s domestic growth story. With economic activity remaining resilient, credit demand has stayed robust across retail and corporate segments. Banks, which spent years cleaning up balance sheets and reducing bad loans, are now in a stronger position to capitalise on growth opportunities. This has made banking stocks attractive at a time when global uncertainties are affecting export-oriented sectors like IT.
The shift in rankings among India’s top companies also highlights the changing nature of market leadership. IT companies were long considered defensive bets, offering stable earnings and protection during global slowdowns. However, the current environment of technological disruption and uneven global demand has made investors more cautious.
Despite the recent correction, analysts note that TCS remains fundamentally strong, with a diversified client base, strong order book, and significant cash reserves. Many believe the current sell-off reflects short-term sentiment rather than a structural decline. Over the long term, IT services are expected to remain a critical part of the global digital ecosystem.
However, in the near term, volatility in IT stocks is likely to persist. Investors are expected to closely track global economic trends, technology spending patterns, and how effectively IT companies adapt to AI-driven changes. Until there is greater clarity, banking stocks may continue to enjoy a valuation premium.
The fall of TCS below Rs 10 lakh crore and the rise of ICICI Bank and SBI mark an important moment for Indian markets. It serves as a reminder that sector leadership can change quickly, driven by earnings visibility, growth prospects, and investor sentiment. As markets evolve, adaptability and fundamentals will continue to shape valuations.
Summary
A sharp IT sell-off pushed TCS’s market capitalisation below Rs 10 lakh crore for the first time since December 2020, allowing SBI and ICICI Bank to overtake the IT major amid strong banking stocks.