700,000 applications for Royal Mail shares

<p>Royal Mail shares were seven times oversubscribed.</p>

Business secretary Vince Cable has revealed that there were 700,000 applications for Royal Mail shares and as a result, they are oversubscribed by seven times.

The minister announced that the government still believes they were priced at the correct level, with the official sale set to get underway from Friday (October 11th).

Speaking to a committee in parliament, Mr Cable stated that he is "confident" the government has not underestimated the value of Royal Mail, as has been claimed by the Labour Party.

Shadow business secretary Chuka Umunna suggested the government had got it wrong and investors and hedge funds would profit from the privatisation of the firm, rather than taxpayers.

A note from Panmure also estimated the company to be worth £4.5 billion, which is over £1 billion in excess of the valuation set by the government.

Shares were sold in the firm for between £3 and £3.30 and it is expected they will be priced at around this level when the stock market flotation occurs on Friday.

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