Shares of Anil Agarwal-led Vedanta group company Sterlite Industries and Sesa Goa are in News .

Here are few reasons/Views behind the Restructuring of the stocks.

1) Lack of clarity about a restructuring exercise: Media reports indicate that Vedanta Resources (VED) may restructure holdings in group companies. "Vedanta's stated strategy is to simplify and consolidate its corporate structure. Management reviews options to deliver this strategy on an ongoing basis and will update the market as appropriate," the company has said in a statement.

2) Restructuring per se will not impact valuations of the VED Group but valuations assigned to various assets will determine whether value stays at Sterlite or shifts to the parent company, brokerage firm Kotak said in a report. Citing media reports, Kotak says three restructuring scenarios are possible.

3) Vedanta may merge Sesa Goa with Sterlite: Sterlite is reportedly in talks with the government to acquire 49 per cent stake in Balco and 26 per cent stake in Hindustan Zinc (HZ). Sterlite does not have sufficient assets to fund this acquisition. Sesa's cash flow and the debt leverage it can provide can potentially aid acquisition of HZ stake and Balco stake. Such a scenario is neutral at a fair merger ratio, Kotak says. Besides, this might indicate lack of avenues for strategic utilization of Sesa's cash, the brokerage firm adds.

4) Merger of Sesa Goa and complete ownership of Vedanta Aluminium (VAL). This could be negative in case Sterlite has to assume the entire debt of VAL. Fair value impact in such a case could be Rs. 35 per share, Kotak says.

5) Sterlite becomes the holding company for all VED assets excluding KCM: Negative if Sterlite assumes VAL's entire debt. "We compute impact of Rs. 40 per share on Sterlite's fair value with the assumption of (1) merger ratio of 1:2 between Sterlite and Sesa Goa, ratio of market price before speculation of restructuring, (2) acquisition of 40% stake of VED in Cairn India at CMP of Rs390/share and (3) Sterlite assumes VAL's entire debt and does not pay equity value," Kotak says.

6) This value shift can be prevented if (1) VED assumes part of the debt (even if it transfers the entire ownership in VAL), or (2) compensates Sterlite through a favorable merger ratio of Sesa, though Sesa shareholders may object, or (3) sells its stake in Cairn India at a discount to the market price to ensure that Sterlite's minorities are not impacted by any restructuring plan, the brokerage firm adds.

7) Of particular note will be whether value shifts from Sterlite to VED or stays with Sterlite, Kotak notes. This will be determined by the valuation exercise for VAL, a company with combined debt (internal and external) of US$5.5 billion but EBITDA potential of US$200-300 million (without bauxite and captive coal).

8) The Ministry of Environment and Forests rejected VAL's application for the bauxite mine and stopped the expansion phase of the alumina refinery. This has impacted the existing operations and expansion projects. It has a highly leveraged balance sheet (Rs. 276 billion of debt at the end of December 2011 and is essentially surviving on corporate guarantees given by VED and Sterlite. It is difficult to be sanguine on VAL's operations.

10) The management has highlighted its intent to resolve equity holding of Vedanta by March 2012. Dual listing structure is in the offing. Expected structure reduces risk for Sterlite. Merger ratios scenario analysis indicates Sterlite is well below worst case, Macquarie said in its report.