UK Business Secretary Vince Cable, while testifying on the Royal Mail’s IPO before Parliament’s Business Committee in London today, showed the stark contrast between the health of the United States Postal Service (USPS) and the Royal Mail.

Royal mail

Royal Mail share applications

Application for shares of the Royal Mail Group Ltd. drew over 700,000 application from retail investors. In the largest privatization since British Rail in the early 90’s, Cable said he and his department were surprised by the interest in the mail carrier. Actually, being British, he more likely suggested that he was “taken aback” or “overwhelmed” but that’s neither here nor there. Though, be sure he spells it “privitisation.”

Cable’s department didn’t push the sale as his predecessor did in 1986 when British Gas, now Centrica PLC (LON:CNA) (OTCMKTS:CPYYY), went private. During that move, the British government blitzed television viewers with advertisements and set a strict one month timetable from the announcement that it would go public to the time when the shares would be sold. Nonetheless, and without a similar media campaign, shares in Royal Mail are seven times oversubscribed.

Royal Mail employees being offered shares

Each of the 150,000 Royal Mail’s current employees are being offered free shares in the company, and with a few exceptions nearly all of them have said “thank you very much.” 371, however, have chosen not to take the shares that they have coming; presumably, out of deep-seated objection to the idea or ignorance. Certainly this over-subscription by a power of seven has nothing to do with the belief that 150,000 people would turn down free money.

During his testimony, Cable made it clear that he was looking to “place the shares with long-term investors,” and wholeheartedly rebuffed suggestions by lawmakers that the price per share had been set too low. He also made it clear that MPs shouldn’t expect a windfall tax on any property sales the new company might make following the offering.

Royal Mail stock expectations

It’s widely believed by so-called gray market pricing that the stock could gain 20 percent the moment the Royal Mail begins trading. The British government is expecting the stock sale to raise $2.7 billion (USD).

Looking at previously oversubscribed offerings, Cable said, “the trajectory of their subsequent share values has been very, very disparate—some have gone down.”

Shares in the 360-year-old company were opened on Sept. 27 and were fully subscribed in just a few hours. The sale is now closed and is set to begin conditional trading on Friday.