Royal Mail IPO looks like it will be very popular

With the Royal Mail IPO less than a week away it looks like it will be well oversubscribed and purchases will be scaled back accordingly. Institutions have been looking to get in big time, they want £30 billion's worth.

Institutional investors have placed more than £30bn of orders for Royal Mail shares as the Government puts the finishing touches to the biggest UK privatisation for decades.

Sky News understands that firms from around the world have deluged the investment banks running the postal operator's sell-off on an unprecedented scale, with the initial public offering more than ten times oversubscribed.

Whitehall sources said that the £30bn figure excluded demand from members of the public, with a last-minute rush for shares expected throughout the course of Tuesday.

http://news.sky.com/story/1151723/royal-mail-city-demand-for-shares-tops-30bn

So, if you are small investor the chances are that if you want these long term for income then you may have to wait and hope for a pullback once trading starts as the chances are you won't get the full amount asked for. The Government have said that the retail investor will get their "fair share" when the allocations are finally announced. It's also possible that some institutional buyers will get none. Let's hope so. If the institutions are that desperate to buy they will start hoovering them up from day one.

What is interesting about the RM float is that in many respects it couldn't happen at a worse time for the markets with the US budget/debt talks ongoing. It might be one of the few big name shares still going up in price come next week if US politicians can't find common ground to do a deal. However, the fact that the institutions have asked for so much, even though they have done so with the full knowledge that it will be scaled back, suggests there is still an appetite for buying shares despite market fears of wider issues like a US default.