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We round up what you need to know about Royal Mail shares to help you decide whether to hold, sell, or buy.

Royal Mail investors are sat on bumper profits  from the controversial flotation of the postal service, sparking concerns that the listing was initially undervalued.

The shares were up 80 per cent on 26 February on the listing price of 330p in October.

When Royal Mail’s share price soared after privatisation, Business Secretary Vince Cable dismissed criticism that it had been undervalued and said a proper view could not be taken for three or six  months.

That six months is approaching fast and new details have emerged that show the government went for the lower range of prices put forward.

Royal Mail was valued at up to £8.6bn ahead of its privatisation in October, it has emerged, as the row over how undervalued its £3.3bn sale was rumbles on.

The gulf in estimates made by 21 anonymous banks was revealed today, highlighting a staggering £5.8bn gap between that highest figure and the lowest of £2.8bn.

The banks estimated an average lower price of £3.9bn and an upper value of £4.8bn, underlining why shares have soared 81 per cent since their float at 330p.

The offer was priced between 260p and 330p, with high demand pushing the eventual float price to the upper end of that scale, valuing the postal service at £3.3bn.

In November, Royal Mail’s first set of results since hitting the stock market showed profits almost doubled.

Investors like the growth area of the Royal Mail’s parcel business, seen as a ripe for reaping the rewards of increased internet shopping and its coveted network. Investors should beware that there have been questions raised over this, however, with parcel revenues up a solid but not spectacular 8 per cent in a Royal Mail figures update and that was thanks to changing prices not increased volumes, which were flat.

Flotation: Royal Mail will make its market debut on October 11

Shares in the Royal Mail were priced at 330p but no investors who applied for shares got more than the minimum £749.10 allocation — while those who applied for more than £10,000 received nothing.

The share price valued the postal service at £3.3billion, the Government confirmed after the stock market closed on Thursday 10 October.

In total 690,000 private investors got a flotation stake in the Royal Mail. 93,000 people who applied for the minimum £750 had their application all but met in full while 3 7 per cent of applicants, amounting to 270,000 people, got at least half the shares they applied for.

The 5 per cent of individuals applying for more than £10,000 got nothing.

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