India’s capital markets are becoming more mature and interconnected. Retail participation is growing. Foreign institutional investors continue to show interest. But investor confidence depends heavily on one thing: transparency. Transparent reporting tells the story behind the numbers. It helps investors judge risk, builds trust in management, and helps them decide where to invest. When reporting is weak, markets wobble. When reporting is clear and consistent, investor sentiment strengthens.
Why transparent reporting matters
If disclosures are made preemptively and transparently, it helps decrease irregularities or uneven information distribution among founders, their boards, and key stakeholders.
Investors are able to understand strategy, performance, and governance when companies report fully in a deeper manner.
Companies that provide clarity and transparency have the right to demand a premium, while those that don’t have increased chances of facing reputational damage and unpredictable investor behaviour.
In uncertain times, like regulatory stress or supply chain shocks, clear reporting can enable stabilisation in processes and the environment.
India’s evolving disclosure rules and recent updates (2024–25)
India has been steadily improving its regulatory framework for corporate reporting. Some key developments include SEBI’s Listing Obligations and Disclosure Requirements (LODR), which continues to demand quarterly financial disclosures.
In February 2025, SEBI introduced industry standards for related-party transactions (RPTs), requiring listed companies to provide minimum information to audit committees and shareholders. SEBI was also flexible and extended implementation deadlines for those RPT standards to allow time for companies to adapt. As recently as September 2025, further rules have been introduced that require detailed certificates, valuations, and disclosures for RPTs above a certain threshold.
Example: Transparent reporting in action
Infosys ESG Vision 2030
Infosys has long been among the companies setting higher disclosure standards. In its 2024-25 report, it highlighted carbon neutrality across Scope 1 and 2 emissions, advanced water and waste management, and expanded digital skilling efforts. Investors have responded positively to these disclosures, with many analysts citing Infosys as a benchmark for transparency in ESG reporting.
How transparent reporting shapes investor sentiment
Transparent reporting influences investor behaviour in several ways:
Risk assessment becomes clearer
Investors can evaluate financial health, governance risks, and related-party conflicts.
Forward guidance helps
When companies share their strategy, goals, and challenges (not just past performance), investors feel more involved.
Reduced volatility
Unexpected bad outcomes drop when disclosures are open. Rumours and speculation have less room.
Attracting long-term capital
Strong disclosure practices also tend to attract foreign and institutional investors. Even retail investors tend to favour organisations that they believe are more trustworthy and transparent.
Challenges that remain
Despite progress in India with regard to rules and regulatory frameworks and the growing adoption of such practices, some gaps still remain:
Many companies still focus mostly on compliance rather than narrative. The “why” behind numbers is often missing.
Forward-looking guidance is weak. A very small number of organisations are even able to set out realistic targets. Then, following through and planning how these targets will be met is also quite a hurdle.
ESG disclosures are also seen to vary highly in quality and depth. Some firms publish glossy reports; others provide minimal or boilerplate content.
Enforcement and consistency remain concerns. Smaller listed entities sometimes struggle to comply with detailed disclosure norms.
Global benchmarks and India’s relative positioning
If we look abroad, we can study the EU’s Corporate Sustainability Reporting Directive (CSRD), which came into effect recently, which emphasises non-financial disclosures, forward looking statements, and stakeholder engagement.
Further west, we see the U.S. SEC also expects more detailed management discussion & analysis, risk disclosures, and oversight.
In comparison, India is on a promising path. The BRSR (Business Responsibility and Sustainability Reporting) framework for the top 1,000 listed companies is a strong move. But narrative reporting and consistent forward-guidance still lag behind global best practice.
Technology as an enabler of transparency
Technology helps bridge disclosure gaps:
Use of XBRL (eXtensible Business Reporting Language) for standardised financial reporting improves comparability.
Digital platforms are making financial reports more accessible to retail investors.
AI tools and analytics are increasingly used to flag anomalies in reporting (e.g., unusual RPTs or missing disclosures).
These tools raise the baseline of what investors expect. They also empower activist shareholders and analysts.
Implications for corporates, regulators and investors
Corporations must view disclosures not merely as rules to comply with, but as strategic tools. Clear reporting can strengthen credibility, valuation, and investor loyalty.
Regulators need to balance strict norms with ease of compliance for smaller firms. Uniform standards and timely guidance help.
Investors should deepen their literacy in reading disclosures, looking for narrative, strategy, and risk, not just top-line numbers.
Conclusion
Transparent reporting is the cornerstone of trust in India’s evolving markets. When companies fully disclose their finances, related-party transactions, strategy, and ESG risks, investors gain confidence. They feel safer placing capital. The reforms in 2024-25 show SEBI and Indian companies are moving in the right direction.
But the journey is far from over. Firms that embed transparency in their culture will lead the pack. Regulators who enforce meaning and consistency will hold the line. And investors who demand clarity will shape the norms.
At SPJIMR’s PGPM, we train professionals who understand this ecosystem deeply. We teach them financial reporting, governance, ESG frameworks, and narrative transparency. We believe that India’s growth story will be written not by silent balance sheets, but by companies that speak openly, honestly, and strategically.
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About the faculty
Anshul Verma
Anshul Verma holds a double doctorate from Dr. B.R. Ambedkar University, with specialisations in Management and Applied Business Economics. Over the course of his 20-year academic career, he has served as a faculty member in finance at leading graduate management institutions in India.
