The article explores the world of efficient market hypothesis and the Indian experience of the same.

"I believe there is no other proposition in economics which has more solid empirical evidence supporting it than the Efficient Market Hypothesis".

The Efficient Market Hypothesis (EMH) is inextricably related to the Random Walk theory. Random Walk refers to successive price changes that are independent to each other. Bachelier (1990) first suggested the idea that stock prices follow a random pattern. Sadly, Bachelier's contribution was overlooked until it was circulated to economists by Paul Samuelson in the late 1950s and subsequently published in 1964. Most of the researches until the 1970s were proving or attempting to disprove the fact that share prices follow a random walk. But, why share prices followed a random walk was left to be proved. There was plenty of evidence, but a formal theory was missing. The need of the hour was a model of share price behavior to explain the random walk. This gap was filled by the EMH.

The intention of this article is to explain the EMH and its implications to common investors and to give a introductory overview of the literature and research documenting its validity or the lack thereof in the Indian capital market. This is followed by a definition of market efficiency and its implications. The article further provides some anomalies attached to the efficiency of capital market. Then it analyzes the role of fundamental and technical analysis with respect to EMH followed by a brief review of studies made on EMH in the context of the Indian capital market. The article ends with concluding remarks.

Portfolio Organizer Magazine, Efficient Market Hypothesis, Capital Markets, Technical Analysis, Finance Literature, Accounting Literature, Capitalization Firms, Capital Asset Pricing Model, CAPM, Western Economies, Post Announcement Drift, Financial Reporting Practices, Securities Market, Bombay Stock Exchange, BSE, National Stock Exchange, Indian Stock Market, Corporate Announcements, Financial Statements.