The Sustainability Impact of Green Bond Issuance: Market Signalling and Transition Outcomes in India

ABSTRACT This study examines whether corporate green bond issuance in India is associated with substantive transition‐related outcomes or primarily reflects market signalling. Using 44 corporate green bond issuance events from 2015 to 2025, an event‐study analysis documents positive equity‐market reactions, with cumulative abnormal returns that strengthen with the length of the post‐issuance window and are most pronounced over the [0,+7] trading‐day horizon, consistent with the gradual incorporation of sustainability‐related information into prices. To assess whether issuance is associated with outcomes beyond short‐run market perceptions, the analysis further examines issuer‐level transition performance using a monthly panel of issuing firms for which consistent sustainability and market data are available. Fixed‐effects and event‐time specifications indicate post‐issuance improvements in a standardised composite transition outcome index. The index captures sustainability performance, valuation expectations and liquidity conditions relative to issuers' own pre‐issuance baselines. Dynamic profiles reveal no evidence of anticipatory changes before issuance and suggest that post‐issuance improvements persist over time rather than dissipate immediately. While inference is necessarily conservative given the concentrated issuer panel, the combined evidence from market reactions and firm‐level outcomes suggests that, under strengthened disclosure requirements and regulatory oversight, corporate green bonds in India are associated with economically meaningful transition‐related improvements rather than functioning solely as symbolic signals.