Beaten down IT majors catch fancy of prop traders

Proprietary traders are exploiting a pricing anomaly in Indian IT heavyweights Wipro, HCLTech, Infosys and TCS, where underlying shares are trading above their futures contracts, using NSE's stock lending and borrowing mechanism (SLBM) for a reverse arbitrage strategy that delivers high single- to double-digit annualized gross returns with near-zero market risk. In June, Wipro was the most borrowed stock among 396 securities in the SLBM with 122.43 million shares outstanding, followed by Infosys at 29.15 million, HCLTech at 15.06 million and TCS at 5.34 million, together accounting for over half of the 329.97 million shares borrowed that month. The anomaly emerged as futures on IT stocks slipped to discounts to spot after the sector underperformed the Nifty over the past 15 months, with money rotating into global AI-linked names such as Nvidia, TSMC, Samsung and Microsoft, and analysts expect the trend to persist in coming quarters.