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It was already a expected announcement which was expected by the stock market but even after it's been announced that ITC, a company with various businesses like hotels, cigarettes, FMCG, and many more but now when recently ITC announced will create a separate entity for the hotels even though it was expected by stock market still share price fell of ITC fell by 3.87% after the news came out about demerger.

ITC will still have 40% ownerhip of the new hotel entity so only the remaining 60% will be given to the current shareholders the main reason for the drop is that investors expected only a partial unlocking of value because of this current scenario investors thought the value unlocked as they had hoped.

If you don't know then we would like to tell you that value unlocking is all about revealing the hidden value of different parts of a company. It used to be done with the help of demergers, spin-offs, or partnerships to show how valuable each piece is. Usually, this type of tactic is used to help the company perform better and attract more investors towards itself.

Share Market experts told us that the drop in share price might also be the result due to the market conditions, because after the news some traders sold their share which helped them in booking profit for themselves. However, some experts also believe that demerger will eventually benefit ITC's shareholders because it creates a separate entity for the hotel business.

If we see this demerger from the perspective of the hospitality industry in India, the demerger is seen as a positive development. It totally shows the increased competition which is a result of the demerger which could definitely benefit consumers in the long run After all this demerger shows some confidence in the sector which makes it even more attractive to potential investors.

Overall, ITC has been performing well in the stock market this year, gaining 39% in the last year compared to the 10% gain in the Sensex index, which is the equity benchmark.

ITC Share Price Target 2023

There is a mixed response from the experts after being asked the question What will be the ITC share price target at the end of the year 2023? "

Some stock market experts believes that it shows positivity and confidence in ITC because of this they decided to demerge the hotels from their hands because they already have 12 more business in their hand. Logically it has been seen that no matter how much tax the government is used to put on things like cigarettes and alcohol ITC is a company that is earning a very good amount of profit with their Cigrattes business alone.

So, it's very logical to think that for now share price of ITC will go down for sure but eventually at the end of the year it will rise again and its price will be around 460 which is ITC's share price target 2023.

Conclusion

The information provided in this blog is for educational purposes only and should not be considered financial or investment advice. Trading in stocks and securities involves risks, and individuals should carefully evaluate their financial situation and consult with professionals before making any trading decisions, you can take the help of Finskool advisory service which will increase your chances of earning profit.