The primary purpose of this study is to examine the effect of dividend declaration on stock price fluctuations in the Indian equity market. Specifically, the study aims to analyze how dividend announcements influence share price volatility and investor behavior around the announcement period for companies listed on the National Stock Exchange (NSE). The research seeks to assess the market reaction to dividend-related information and to determine whether dividend declarations convey meaningful signals that impact stock prices. Additionally, the study intends to evaluate the efficiency of the Indian equity market in incorporating dividend information into share prices, thereby providing insights useful to investors, corporate managers, and policymakers in formulating effective dividend and investment strategies. The findings of the study reveal that dividend announcements have a significant impact on short-term stock price volatility, indicating the presence of information signaling effects in the Indian equity market. Positive dividend declarations tend to generate favorable market reactions, while changes or reductions in dividend payouts often lead to increased price fluctuations. The results suggest that the Indian stock market exhibits semi-strong form efficiency, as stock prices quickly incorporate publicly available dividend-related information. The study provides valuable insights for investors, corporate managers, and policymakers in understanding market behavior around dividend events and highlights the importance of dividend policy as a strategic financial decision