Mumbai, Feb. 27: The Vedanta group’s move to create Sesa Sterlite evoked a mixed reaction among brokerages with some saying the group’s second restructuring attempt does not generate the same concerns that cropped up during the previous attempt even as others felt the swap ratio was negative for Sesa Goa and the inclusion of Vedanta Aluminium (VAL) could be a big drag on the merged entity.

Investors, however, chose to ignore the positive aspects of the proposed merger with both Sterlite Industries (India) Ltd and Sesa Goa ending in the red on the bourses today.

However, the impact was felt more on Sesa Goa, with the share price of the iron ore company crashing 10.45 per cent to close at Rs 203.60 on the BSE, while the Sterlite share lost 2.53 per cent to end at Rs 115.65.

Dipen Shah, head of fundamental research at Kotak Securities, said one of the reasons behind today’s sharp fall in the Sesa Goa stock was the feeling that the merger ratio was slightly in favour of Sterlite. Shah feels that the merger will not bring much to the table for investors.

“There are no reasonable operational synergies visible to us in the merger,’’ he said. There is limited financial and taxation synergies and the transaction will result in merging the considerably high and consistent cash burning VAL with good cash generating entities to meet VAL’s ongoing funding requirements, he added.

“Sesa Goa will be paying around 11 per cent premium to acquire Cairn India from Vedanta Resources over its acquisition price for a 20.1 per cent stake in Cairn India, which nullifies the earlier stated gain to a large extent,’’ he said.

However, it is the consolidation of VAL that has come across as a big worry for analysts tracking the companies. Chirag Shah and Faisal Memon at Barclays Capital said in a report that the VAL stake transfer might not find favour with Sesa shareholders.

“The outlook for VAL is uncertain given the unavailability of captive bauxite (Niyamgiri controversy) and alumina (environmental clearance issue).”