"We are keeping an eye on the ITDC and HCI disinvestment plans and would be interested in those hotels located in the smaller cities," managing director of Unitech's hospitality division Dr SP Shrivastava, said.

After operating the Radisson hotel in Delhi for over a year in collaboration with Carlson Hospitality of US, Unitech was more confident of managing the hotel business and planned to buy existing properties besides constructing its own hotels, Shrivastava said. "Unitech would be ready to buy some of the ITDC hotels either by itself or by tying up with a partner," he said.

ITDC's three-star property in Varanasi is one of the properties it has been interested in besides the ones at Ooty and Jaipur. "The smaller cities would be more suitable for our gameplan as we already have one hotel in Delhi (Radisson) with another one coming up in Bangalore," he said.

Unitech is especially interested in the three-star budget hotel category which could be marketed under the Country Inns and Suites brand of its partner Carlson Hospitality.

Unitech's four-star Radisson hotel in Varanasi is already under construction and is expected to be ready by September next year while the 126-room one in Bangalore will start operating this September itself.

Unitech has a joint venture partnership with Radisson Hotels Worldwide for a franchise arrangement for hotels in Varanasi, Ludhiana, Ahmedabad, Cochin and Jallandhar.

"While a Radisson hotel requires 35 crore, the Country Inns and Suites hotels needs about 15 crore to build and the existing ITDC budget hotels would fit into our plans," Shrivastava said.

"However, it would all depend on how the Government finalises its policy regarding these hotels and how long it takes," he said.

The Government has not yet finalised on whether to sell the ITDC properties at one go or sell them separately. There has also been talk about leasing out the profitable hotels to private companies.

For the Hotel Corporation of India properties, investment bank Jardine Fleming has been appointed to find a strategic partner.

HCI, which has an equity base of Rs 40.6 crore, has five hotels in the country, four of which are in the five-star category.

"While the guidelines for bank loans for greenfield projects are clear, for existing properties it is not so, which is another problem in buying these," he added.