Lower dilution may dash LIC's marquee index inclusion hopes

For a quick entry into the Sensex, a company needs to rank among the top 10 in terms of free-float market cap.

Life Insurance Corporation (LIC) is expected to hit the initial public offering (IPO) market at a valuation of Rs 6 trillion. The government — which currently owns 100 per cent equity — is looking to divest between 3.5 per cent and 5 per cent stake in the IPO, depending on investor demand.

The lowered valuation and tiny free float shall create a roadblock for the insurance giant’s inclusion in global indices, such as those belonging to MSCI and FTSE, as well as the domestic benchmarks — the Nifty50 and the Sensex.

With a market cap of Rs 6 trillion, LIC will be