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Analysts are expecting that small investors could enjoy an early Christmas present, with the smart money predicting that the shares will be trading at as much as a 20 per cent premium to the issue price during the first week. A short-term "stag" profit might well be yours for the taking.

Retail investors have until a minute before the stroke of midnight to get their applications in. Given the demand for shares, applicants are certainly not going to be receiving as many as they ask for.

Stockbrokers have bid for $12 billion of Medibank shares on behalf of their clients. That is more than twice the value of the expected market capitalisation of the health insurer.

Of the $12 billion-worth sought, stockbrokers will receive an allocation of only $1.5 billion.

Stockbrokers bid for more shares than they really want because they knew their applications for shares would be scaled-back, but nevertheless, it is still strong demand.

The float prospectus gives an "indicative" price range for the shares of between $1.55 and $2. That means retail investors will not be paying more than $2 a share on the first $250,000.

While analysts expect the share price to trade for more than the float price initially, with prospects of short-term profits for shareholders who sell, they are cautious on Medibank's longer-term prospects.

At $2 a share, it would be expensive compared with Medibank's earnings and compared with other listed companies in the health insurance sector, analysts says.

Scott Phillips, a Motley Fool Investment adviser, has written that Medibank may well be a great investment.

However, the "listing price puts the company on a sky-high valuation for a business with a history of only moderate growth".

It will need to cut costs, raise premiums and grow the number of policyholders by a large enough degree to justify the offer price, he says.

Phillips also questions the salesmanship being employed. "Not wanting to 'miss out' on the opportunity of making some money on the float, we're already preconditioned to be tempted," he says

Michael McCarthy, chief market strategist at CMC Markets, thinks it could take some time for Medibank Private to deliver the cost savings and the cultural transformation that the market expects.

But at $2 the shares are, he says,  priced to perfection.

Institutions will bid for shares next week through an auction process. They may well pay more than $2 a share.

Some institutions could wait and buy the shares on the market after listing. Because Medibank will be one of the larger companies, institutions will likely want to buy more shares on-market to top-up their holdings. "It does look like the shares could trade higher than $2, at least in the short term," McCarthy says.

Peter Warnes, head of equities research at Morningstar, says retail investors can assume they will be paying $2 a share.

He says the share price is likely to be higher on debut, but does not think it will hold. "We have a long-term valuation on it at $2.10," he says. "We stress it is a long-term valuation and a lot of things have got to work for Medibank," he says.

At $2 a share, the shares will be on an implied gross dividend yield, after franking credits, of about 6 per cent.

That is better than term deposits, but not as good as the big banks, whose shares are on dividend yields of between 7 and almost 9 per cent after franking credits.

Telstra shares can be bought on a gross dividend yield of more than 7 per cent.

The prospectus, which includes the application form, can be found at medibankprivateshareoffer.com.au or by calling 1800 998 778.