One of the lead banks on the float of Britain's Royal Mail said the government could not have sold its stake in the postal firm at the price the shares are trading at now.
On Wednesday bankers, including from UBS and Goldman Sachs which managed the initial public offering (IPO), were summoned before the Business Innovation and Skills committee to explain their valuations of Royal Mail.
Richard Cormack, co-head of equity capital markets at Goldman Sachs, said feedback about what investors were willing to pay and the number of shares in the company the market was being offered in one go, affected the price.
"The average (trading) volume at the moment on a daily basis of these shares is about 1.3 million shares versus the 600 million shares that we placed at the time of the IPO. I don't think that today's price is indicative of where we could have placed 600 million shares," he said.
The government sold a 60 percent stake in October for 330 pence per share, valuing the company at 3.3 billion pounds. The shares have risen as much as 80 percent since. On Wednesday, the stock was trading down 1.5 percent at 542 pence.
Citigroup, Deutsche Bank, JP Morgan and Panmure Gordon, none of whom worked on the listing, told the committee that in the months before the float they had given the government valuations that ranged from 3.7 billion to as much as 8.5 billion pounds.