The Pride Group of Hotels will float an initial public offering in the first quarter of 2008 to part-fund its expansion plans of Rs 340 crore.

The Pride Group chairman S P Jain said on Thursday that the Mumbai-based business hotel chain has ceded 11.1 per cent stake to Kotak India Real Estate Fund for a consideration of Rs 45 crore. This investment will go towards part-financing Pride Hotel's expansion and renovation capex.

An additional Rs 10 crore has been received from a Mauritius-based primary fund towards the expansion corpus, Jain added.

The group aims to utilise the funds for setting up new hotels in Mumbai, Goa, Bangalore and Alibaug. Pride Hotels has acquired 4.5 acres at Alibaug (near Mumbai), where it proposes to set up a 100-room resort-cum-spa.

It has also bought property near the international airport in Mumbai for the construction of a 200-room hotel. The group's hotel in Bangalore is under construction and is set to open by June 2008.

The Pride Hotels has 11 food outlets, including restaurants, coffee shops and bars, besides 19 banquet halls and conference rooms on its properties.

The group currently offers 430 rooms in Nagpur, Ahmedabad, Pune and Chennai.

The addition of 696 rooms across western and southern India by 2009-2010 will take the number of five-star category rooms to 1,126, Jain said.

The Pride Hotels will also look at the budget hotel segment, with its Pride Biznotel brand. Pride Biznotel will have about 60 to 125 furnished rooms, going ahead.