Corporate Social Responsibility (CSR) has emerged as a key component of corporate governance and stakeholder engagement, especially in India, where CSR spending became mandatory under Section 135 of the Companies Act, 2013. The present study examines the relationship between CSR expenditure and stock prices of the top ten companies listed on the National Stock Exchange (NSE) based on market capitalisation. The study is based on secondary data collected from annual reports, CSR disclosures, and NSE stock price records for a ten-year period. Statistical tools such as correlation and simple linear regression were employed to analyse the relationship between CSR spending (independent variable) and stock price performance (dependent variable). The findings reveal a weak and statistically insignificant relationship between CSR expenditure and stock prices. The overall correlation coefficient was 0.0855, indicating minimal association between the variables. Similarly, the regression results demonstrated a low R-square value of 0.008, suggesting that CSR spending explains less than 1% of the variation in stock prices. The regression coefficient for CSR was positive but not statistically significant (p = 0.345), leading to the acceptance of the null hypothesis that CSR expenditure does not significantly impact stock prices of selected NSE- listed firms.
The study concludes that CSR spending, although essential for compliance and ethical positioning, may not yet be perceived by investors as a direct determinant of stock market performance in the Indian context. The results imply that the financial market may value CSR benefits as long-term and intangible rather than short-term monetary gains. The study suggests incorporating more variables, such as ESG ratings, profitability measures, and event-based analysis, in future research to better understand investor perception and market behaviour toward socially responsible corporate actions. Overall, the findings suggest that the impact of CSR on stock market performance is not uniform across companies but depends on sectoral dynamics, investor sentiment, perceived CSR effectiveness, and the strategic integration of CSR within corporate operations.