Royal Mail’s biggest shareholder Daniel Kretinsky ups his bet as Vesa takes a £222 million stake in the troubled business

Czech energy tycoon Daniel Kretinsky today bought another big chunk of Royal Mail, lifting his shareholding up to 12.1% as part of his gamble that the company’s shares are drastically cheap.

The billionaire known as the Czech Sphinx for his secretive ways now owns a stake worth £222 million after his vehicle, Vesa Equity, upped its stake from 11% and taking its holding up to 1 million shares.

Royal Mail shares have plunged as people have stopped sending letters and union disputes have battered confidence in the firm.

Chief executive Rico Black quit, signalling a significant change is afoot at the group.

It is unclear what Kretinsky’s strategy is, but City analysts have suggested he may keen on buying out its overseas arm, GLS.

Others suggest he is more probably seeing Royal Mail as undervalued. He has previously invested in US retailers Footlocker and Macy’s and French supermarkets group Casino as well as numerous Eastern European logistics companies.

Fund manager Schroders has also been increasing its stake in recent weeks, taking its share up to 10.8%.

Royal Mail’s hundreds of thousands of small shareholders will be hoping Schroders and the Prague-based investor are right. Most of them bought in at the time of the flotation at 330p only to see the shares soar above 630p before plunging to current levels of 183.85p. The stock has improved since lows of 124p in March with the market’s rally.

While Kretinsky is betting on shares rising, plenty take the opposite view. This week saw the hedge fund WorldQuant increase its “short” bet against the company’s shares, joining bigger shorts such as BlackRock, which upped its short position to nearly 4% the week before.

A Royal Mail spokesman said: “Ongoing shareholder engagement is a key priority for us. We are focused on delivering our strategy at pace on behalf of our stakeholders.”