Late scramble for 'undervalued' Royal Mail shares ahead of Britain's biggest privatisation offering since the railways

City institutions bidding less than the top price of 330p for Royal Mail shares look set to miss out (AP)

City institutions bidding less than the top price of 330p for Royal Mail shares look set to miss out today, as Britain's biggest privatisation offering since the railways enters its final hours.

The Government capped the share price of the 500-year-old postal operator at 330p, and huge demand - some analysts expect the IPO to be oversubscribed by 10 times - means brokers expect Royal Mail to hit the top of its price range. City commentator David Buik, of Panmure Gordon, said: "Those allocated shares will be cut back and therefore disappointed at missing out on a potential profit in excess of 30%."

Institutional investors have until 5pm today to put in orders for shares in the Royal Mail, whilst private shareholders can put in bids until midnight tonight. At 330p-a-share, the very top of the original 260p-330p range, the postal giant is valued at £3.3 billion and Royal Mail will be expected to go straight in the FTSE100 at the next reshuffle.

Criticism from Labour ministers that Royal Mail has been undervalued seemed to be backed up by market forces. Spread-better IG expects the closing price on Friday, the first day of conditional trading, to be between 403p-409p. That would give investors a profit of almost 25%.

Labour's shadow business secretary Chuka Umunna says the group is being sold too cheaply, "short changing" taxpayers. But Business Secretary Vince Cable last night accused Umunna of being "irresponsible" in talking up the value of shares in the Royal Mail postal service, led by Moya Greene, saying that the price was set after "extensive consultation" with investors. He said: "It is irresponsible to imply that a share offering looks significantly undervalued. I think you should consider the risk that you may be influencing the decisions of retail investors."

Just 368 out of the Royal Mail's 150,000 staff have chosen not to accept free shares in the privatised company - although 100% are expected to vote against the sell-off in the ballot for strike action.