Royal Mail flotation underpriced by £1bn, claim MPs

A committee of MPs has claimed that the government and its advisers in the City underpriced the flotation of Royal Mail by £1bn. A committee of MPs has claimed that the government and its advisers in the City underpriced the flotation of Royal Mail by £1bn. A report by the Business, Innovation and Skills (BIS) Committee said that the privatisation of the postal service group was undervalued and mispriced. It believes that a fear of failure and bad advice led to a "significant underestimate" of the demand for shares in Royal Mail, which was priced at 330p a share when it listed in London last October. The stock, now trading at around the 470-475p mark, had initially surged to a high of 618p. "It's not at all clear that the government's sale of Royal Mail has brought an adequate and appropriate return for taxpayers," said Committee Chair Adrian Bailey. "The government cannot blithely dismiss as 'froth' our committee's concern that the low issue price of this prime public asset has cost the taxpayer around a billion pounds." BC