Department of Commerce, Deen Dayal Upadhyaya College, University of Delhi, Delhi
This paper has examined the announcement effects of bonus issues on equity share prices in India during the six-year period January 1, 1995 to December 31, 2000 with a view to testing the semi-strong efficiency of the Indian stock market. Using a sample of 145 bonus issues, the announcement effects have been studied in terms of the event study methodology. The results reported here are somewhat different from those reported for the developed and developing capital markets where the adjustment of share prices to events of this type seems to have taken place in a relatively shorter time period in comparison to the Indian market. However, the results are supportive to the hypothesis that the Indian stock market is semi-strong efficient.
