Dividend policy remains one of the most extensively debated topics in corporate finance, with theoretical positions ranging from Miller and Modigliani’s dividend irrelevance proposition to the bird-in-hand and signalling theories that argue dividends materially affect firm value. This study empirically examines the impact of dividend policy on firm market value among NSE-listed Information Technology companies in India, using panel data from ten NIFTY IT index constituent companies over FY 2015-16 to FY 2024-25 (100 firm-year observations). Firm market value is measured using Tobin’s Q, while dividend policy is captured through the Dividend Payout Ratio (DPR) and Dividend Yield (DY), alongside firm size, profitability, leverage, and growth as controls. Descriptive statistics, correlation analysis, a Hausman specification test, and Fixed Effects panel regression are employed to test the hypotheses. Findings indicate that DPR has a significant positive impact on Tobin’s Q (β = 0.31, p < 0.05), while DY shows a significant negative association (β = -0.19, p < 0.05), alongside significant effects of profitability, firm size, leverage, and growth; the Hausman test confirms Fixed Effects as the appropriate specification. These results suggest dividend policy is not irrelevant to firm valuation among Indian IT companies, and that payout level and yield operate through distinct valuation channels. The study concludes with implications for corporate financial managers and investors in India’s IT sector.