This article analyzes the reactions of two emerging stock markets—Indian and Russian—to the dividend announcements of traded companies. To ensure a comparable macroeconomic environment for market players, we focus on a period of sustainable economic growth in both of the economies. The period 2010–2012 is selected for analysis since this is when both of the economies experienced growth in the aftermath of the global financial and economic crisis. The sample includes Indian and Russian companies actively traded on the national stock exchanges and that regularly paid dividends on common shares during the study period. An event study methodology was used to show that in contrast with the Indian market, the behavior of the Russian market partly contradicts the dividend signaling theory predictions. Specifically, in the Russian market, investors, on average, reacted negatively to announcements of increased, as well as decreased dividends. The article discusses the possible reasons for the revealed specifics in the market reaction in detail.