Royal Mail share offer - what happens next?
The deadline for applications to buy shares in Royal Mail closed at midnight on 8 October, with the shares expected to be fully listed on the London Stock Exchange at 8am on Tuesday 15 October.
Take-up of the offer is thought to be huge, with a large number of first-time investors tempted by the promise of capital growth plus Royal Mail's plan to offer generous dividends (it has committed to distribute up to about 50% of its profits in the form of dividends in future years).
While members of the public were able to apply for a minimum of £750 of shares through intermediaries such as Hargreaves Lansdown and Interactive Investor (or directly from the government), they are not guaranteed to receive the amount they applied for. It depends on whether the offer is over-subscribed (ie, whether more investors applied for shares than they envisaged).
But for those who applied in time, what happens next. Here's our timeline:
Share allocations should be announced so that investors who bought through brokers will know exactly how many shares they have been allocated ahead of "conditional dealing" starting on 11 October.
However, investors who bought direct from the government may not find out how many shares they have been allocated until 15 October.
If you applied to buy shares via a broker: your broker will tell you how many shares you have been awarded. If you got less than you applied for, you can use the excess cash to purchase more Royal Mail shares, purchase other investments, or ask for it to be returned.
Conditional dealing begins. Once the offer price has been confirmed, conditional dealing starts, which means the shares can unofficially be traded by institutional investors - who will own the bulk (thought to be up to 70%) of the shares.
However, some private investors who applied for shares via a broker may find that they are able to trade at this point, if the broker offers conditional dealing.
The shares will be fully listed on the London Stock Exchange at 8am, and everyone will be able to buy or sell them - known as "unconditional dealing".
People who applied for shares via the government website should find out how many they received. If you've got less than you applied for, you will only be debited the value of your allocation, though you can always buy more shares via the stockmarket.
With trading in Royal Mail shares having begun on this date, anyone (apart from Royal Mail employees who took up the free share offer), can sell their holding. If you bought via a broker, you'll have to pay their dealing fee for selling.
If you bought direct from the official website, you'll pay a 1% commission charge (set at a minimum of £17.50) if you sell online; or a 1% charge with a minimum of £25) if you sell by post.
However, investors who bought direct from the official website can take advantage of a special offer that allows you to sell for a commission fee of 0.75%, with a minimum of £7.50.
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