Royal Mail began conditional trading on the London Stock Exchange this morning (11 October), with shares rising in value by over a third just an hour and a half into its listing.Share prices began trading at 330p with a market capitalisation of £3.3bn when the listing began at 8am today. At 9.30am, the share price rose 35% to 447p.
The Department for Business, Innovation and Skills revealed that the offer for institutional investors was around 20 times over-subscribed, while the retail offer was seven times over-subscribed.
In total, 37% of the members of the public who applied through the retail offer (around 270,000 people), will receive at least half of the shares they applied for. Those who applied for over £10,000 in shares will receive no stake.
Royal Mail chief executive Moya Greene said: “It is gratifying that Royal Mail enjoys the confidence of such a strong group of investors… We are much better positioned to be the universal service provider for the country.”
Business secretary Vince Cable said the government has “struck the right balance” between increasing the number of shares going to small investors and ensuring that employees get a 10% share in Royal Mail.
Petar Cvetkovic, CEO at Royal Mail competitor DX Group, said: “Being a private organisation that controls a monopoly will present new challenges for the Royal Mail as it walks the fine line between being a private and a public company.”
