<p>Stock price response to patent related news has been a topic of interest for both investors and researchers as protection and management of intellectual property, especially patents, have profound implications for company’s market valuation and competitive positioning. This study examines the impact of positive and negative patent news on the stock market valuation of selected Indian manufacturing companies. Furthermore, the impact of specific news category is also examined. The present study employs event study methodology for investigating stock price reaction to patent related news in selected Indian manufacturing companies in general and pharmaceutical sector in particular. Secondary news sources (electronic newspapers and money control website) were used to collect information <i>w.r.t</i> 281 patent related news of 27 manufacturing companies for a period of twenty years, <i>i.e.</i>, from 2001 to 2020. The findings of the study postulate that positive patent related news elicited significant investor reaction reflecting expectations of enhanced cash flows and competitive strength. Both positive and negative patent news pertaining to pharmaceutical sector were associated with significant investor reaction. This is on account of intense scrutiny by the stakeholders (investors and analyst) concerning pharmaceutical sector where patents directly underpin product revenues. Among specific news categories, “patent case lost” and “patent applied” news triggered significant market response. Though patents are considered as the key determinants of firm success and sustainability, there is dearth of research examining the effect of patent related news on the stock price movement especially in context of emerging economies like India. The study provides valuable insights into managers and investors seeking to align innovation strategies with capital market expectations.</p>