Hargreaves Lansdown braces itself for Royal Mail demand

Hargreaves Lansdown is advising interested investors to take advantage of the narrow window for buying shares in Royal Mail.

Royal Mail IPO share offer opens later today (27 September) with the price range set at £2.60p to £3.30p per share, implying a market capitalisation for the business of between £2.6bn to £3.3bn.

Richard Hunter, head of equities at Hargreaves Lansdown, said: “There has been significant interest from private investors registering for the Royal Mail share offer.

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“Once the prospectus is published, and the share offer is open, we will see how much of this interest translates into people applying for shares.

“Time will be short. We expect the share offer to open later today and close on 8 October 2013 and therefore interested investors will need to act quickly.”

Mr Hunter’s comments came after Justin Cooper, chief executive of Capita Registrars, told advisers to get ready for the return of the IPO.

He said London’s initial public offering (IPO) market is alive again as 2013 has seen activity pick up – and for 2014 the picture is even rosier.

The current levels of activity are still low in contrast to the boom years.

Between 2004 and 2007, 1,156 companies were listed, raising £67.2bn. In 2006, the record year, £25.6bn of shares were sold in 307 IPOs.

In 2009, the worst year on record when the UK’s recession was in full force and the stockmarket plunged, only 13 companies came to market – raising a paltry £600m between them.

In 2012, only 53 companies undertook an IPO. Indeed, apart from 2009, 2012 was the worst year for IPOs on the domestic main market in at least the past 15 years as just £1.1bn was raised, one-quarter of a typical year.

However, after including the international main market and the Alternative Investment Market (Aim), 2012 totalled £7.2bn, thanks mainly to the listing of Sberbank, making it the second-best year since the crisis began in 2008.