Royal Mail shares: How to buy at the last minute

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Are you interested in buying Royal Mail shares? You have till tonight to apply. We explain what you need to do.

Time is running out to buy shares in Royal Mail. Here our last minute checklist guides you through your options.

Can I still buy shares by post?

The deadline to buy shares is midnight tonight. To avoid disappointment your best option at this stage is to apply online or by telephone through a broker. A number of brokers, including Hargreaves Lansdown (LSE: HL.L - news) and Interactive Investor, will be open to receive share applications until midnight tonight.

- A list of brokers and dealing costs can be found here.

- We explain why the Gov website is cheap for small amounts

Can I still apply online if I don't have an account? And can it be in an Isa?

Yes. Brokers should allow you to open an account at this stage. The process is infinitely more simple than opening a bank account. Hargreaves Lansdown, one of the largest brokers, said it was possible to open a trading account today with customers only needing a debit card.

Investors can alternatively transfer money via BACS but Hargreaves says this needs to be done by midday to be sure the money has safely transferred in time. Debit card payments can be made up until 11.45pm.

Danny Cox said: "The issue is getting clear funds into the account. Provided they can transfer the money today they can open up either an Isa or share account. They need to have read the prospectus to make sure this is something they really want to do."

He said an Isa can be set up in "less than five minutes on the phone". It is also possible to move the shares into an Isa after they have been received.

How many shares will I get?

The minimum investment is £750 and there is, in theory, no maximum. However, If the share offer is oversubscribed investors may receive fewer shares than they hoped for. Early estimates suggest it may be scaled back by 50pc. The Government has not ruled out a first-come, first-served cut-off, although that would be a highly controversial choice that would exclude most late-comers.

Has demand for the shares been high?

Although it is difficult to gauge how popular the share sale has been before the offer closes, the indications are Royal Mail shares have been in high demand. A number of investment analyst believe the price of the shares, at between £2.60p and £3.30p each, is cheap. This has prompted a late surge in demand.

Analysts at Panmure Gordon said the company was worth up to £4.5 billion well in excess of the current upper valuation of £3.3 billion. This could send the company straight into the FTSE 100 (FTSE: ^FTSE - news) in December when its constituents are next reshuffled.

A minimum investment of £750 could result in an instant profit of around £300 after the float if analysts’ predictions are correct.

Is Royal Mail a ‘buy’?

The Daily Telegraph’s Questor column is impressed and rates the shares a buy. The temptation of an estimated income of around 7pc in a world of rock bottom interest rates gives the shares plenty of appeal. The estimated yield would leave it standing head and shoulders above high income favourites Centrica (4.5pc), Tesco (LSE: TSCO.L - news) (4pc) and SSE (5.7pc). We have also captured the pros and cons of Royal Mail shares here.

What happens after midnight on Tuesday?

The close of the share offer today will be followed by a three-day period of “conditional trading” when City institutions can buy and sell the shares between them.

The final price will be announced on Friday and shares in Royal Mail will be traded on the London Stock Exchange (LSE: LSE.L - news) from Monday next week.

Watch our video: All you need to know about the Royal Mail float.

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