The Testing of Efficient Market Hypotheses: A Study of Indian Pharmaceutical Industry

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  • Abhay Kumar
  • Rashmi Soni
  • Iqbal Thonse Hawaldar Kingdom University
  • Meghna Vyas
  • Vaibhav Yadav


The purpose of this study is to test whether the Indian pharmaceutical companies support efficient market hypotheses (EMH) and examine the efficiency of the Indian stock market in three forms, i.e., the weak, the semi-strong, and the strong form of market efficiency. For testing the weak form of efficiency, researchers collected stock price data of 10 listed pharmaceutical companies for the past six years, from 2012 to 2017 from the NSE website, and conducted a run test. To test the efficiency of semi-strong form, researchers collected data on the announcement of events like buyback, stock split, rights issue, dividend, bonus issue. They conducted an event study on the data. For testing the strong form of efficiency, researchers collected data consisting of NAV of some mutual funds (pharmaceutical funds) and the returns of a benchmarking index to compare. The study concludes that the pharmaceutical companies and Indian stock market is efficient in the weak form of EMH and not efficient in the semi-strong and strong form of EMH.   Keywords: Stock market efficiency, Buyback, Stock split, Rights issue, Dividend announcement, Bonus, Mutual funds, Benchmarking index.JEL Classifications: G13, G14, G 15, G18DOI:


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How to Cite

Kumar, A., Soni, R., Hawaldar, I. T., Vyas, M., & Yadav, V. (2020). The Testing of Efficient Market Hypotheses: A Study of Indian Pharmaceutical Industry. International Journal of Economics and Financial Issues, 10(3), 208–216. Retrieved from