Research on the role of CSR and value creation is at nascent stage in contrast to plethora of studies on CSR and financial performance. The concept of value is also evolving due to changing business environment, globalization and expanded idea of CSR. As managers demand for a more instrumental, pragmatic approach to meet the laudable goal of satisfying legitimate stakeholder claims while at the same time creating competitive advantage through reputation and shareholder value, we propose building a value creation model measuring market value, social value and sustenance value. With a sample of 1845 non-financial firms from 2015 to 2021, we examine the impact of CSR on market value, sustenance value and social value applying panel data models. Positive relationship of CSR with market value is enhanced by the moderating role of diversification strategy and governance in line with the stakeholder theory. Sustenance value is positively related to CSR. Diversification acts as a limiting factor in increasing a firm’s sustainable growth due to transaction costs that may outweigh the risk-reduction benefits of both CSR implementation and geographical diversification, according to the transaction cost theory. Similarly governance also limits the sustainable growth rate through its moderating impact on firm’s CSR spending due to weaker institutional environment in India. Social value is positively related to CSR and governance has a positive moderating impact on CSR towards the firm’s social value. Gender diversity and goodwill have a positive effect on market value and regulation positively effects social value, environmental impact (power expenses) and donations, liquidity position and goodwill also positively effects sustenance value.