Investors of the recently privatised Royal Mail are profiting by selling their shares in the stock market as share price rose much higher than its issue price.

The shares of Royal Mail recorded an increase of 38 per cent to 455p per share during the first day of conditional dealings on the London Stock Exchange. The sale was priced at 330p a share and valued the firm at £3.3 billion. The demand for the shares has been higher than supply and the individual investors have been limited to £750 worth.

Around half of the deals today were for 227 shares, which is the minimum for retail investors. Investors who sold minimum £750 allocation at closing price of 455p per share on Friday made around made £283.75. According to estimates by Investec, the small investors made an average profit of nearly £160million.

About 690,000 people have applied for shares till £750 worth and 35,000 who applied for shares worth more than £10,000 will not be allotted shares. Investors are expressing strong interest in acquiring the shares of the Royal Mail. The investors were buying the shares to make an instant 25 per cent as the government decided to sell the shares cheaper.