A report by City A.M claims US interest in the newly created bank is helping to push the share price to its upper limit of 290p.
The Initial Public Offering, announced in May, priced the shares between 220p and 290p was expected to raise in the region of £1.275bn.
But due to the heightened demand for the shares the bank is now expected to be valued at around £1.3bn to £1.4bn; its net asset value is £1.6bn.
Speaking to City A.M. analyst Gary Greenwood from Shore Capital said even at the top end price of 290p the stock could be undervalued but the bank’s strategy may to create an ‘enticing investment opportunity’.
Lloyds is required by European regulators to divest its interest in the TSB branch network by the end of 2015 as a condition of its 2008 government bailout, which gave the state a 25% stake in the bank.
The IPO will allow Lloyds to sell 25% of its stake in TSB, which is expected to take place on 20 June.
Interest in the Initial Public Offering began to gain pace last week when Mark Carney said interest rates would rise sooner than expected, during his Mansion House speech.
Analysts have suggested this implies a rate rise before the end of this year.
On Monday Sky News said the bank was considering raising the lower limit of its share price range to 240p early next week.
