Floating insurance group’s market cap could fall short of £3.1bn threshold


Direct Line Group’s market capitalisation when it floats could be short of the level required for the FTSE 100 list of large-cap stocks, the Financial Times reports.

On Friday, Direct Line announced  the expected price range for its initial public offering (IPO) of between 160p and 195p per share.

The maximum market capitalisation the insurer could achieve for the entire company with this price range would be £2.93bn. The FT said that based on Friday’s closing prices, however, the threshold for entry into the FTSE 100 is £3.1bn.

The minimum market capitalisation Direct Line Group can expect on flotation within its announced price range is £2.4bn.

Direct Line Group’s first day of conditional trading on the London Stock Exchange is expected to be 11 October, with unconditional trading commencing on 18 October.

Current parent Royal Bank of Scotland is floating up to 33.3%, or 500 million shares, of Direct Line Group in the IPO. The minimum amount it can float is 25%.