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Market reaction to dividend announcements: Evidence from Nifty 50 and Non-Nifty 50 IT firms in India

Bhavna Yadav et al.

International Journal of Business and Management (IJBM)2026https://doi.org/10.56879/ijbm.v5i1.15article
ABDC C
Weight
0.50

What the paper says

This study examines the market reaction to dividend announcements in the Indian information technology (IT) sector, with particular emphasis on whether inclusion in the NIFTY 50 index influences investor response. Using an event study methodology, the analysis is conducted on a sample of ten IT firms, five NIFTY 50 constituents and five non-NIFTY 50 firms, over the period 2013–2024. Abnormal returns are calculated using the market model within an eleven-day event window surrounding dividend announcements. The findings indicate that NIFTY 50 firms experience positive and statistically significant abnormal returns following dividend announcements, supporting the dividend signaling hypothesis. In contrast, non-index firms exhibit negative and significant market reactions, suggesting investor skepticism regarding dividend signals from less visible companies. The results imply that index membership enhances corporate credibility, reduces information asymmetry, and strengthens the informational content of dividend announcements. These findings offer implications for investors, corporate managers, and regulators, highlighting the importance of transparent dividend policies and effective communication strategies, particularly for mid-cap and smaller firms.

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https://doi.org/https://doi.org/10.56879/ijbm.v5i1.15

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@article{bhavna2026,
  title        = {{Market reaction to dividend announcements: Evidence from Nifty 50 and Non-Nifty 50 IT firms in India}},
  author       = {Bhavna Yadav et al.},
  journal      = {International Journal of Business and Management (IJBM)},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.56879/ijbm.v5i1.15},
}

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Market reaction to dividend announcements: Evidence from Nifty 50 and Non-Nifty 50 IT firms in India

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.