PIH owns the Hotel Blue Diamond in Pune which has been in operations for over three decades and was the only five star hotel in Pune for a long time. PIH has two other properties -- Hotel Pearl at Kolhapur and City Inn at Baramati. It also has a bakery division which runs the popular `Baker's Basket' outlets across Pune. While Pearl is a very old property City Inn it become fully operational only during 1996-97.

The entry of international hotel chains such as Holiday Inn and Meridien into Pune had increased competition in the city's hospitality business. This coupled with the Kirloskar group's plans to focus on core areas has led to the move to sell its property. The company had been receiving enquiries for the acquisition of the company's business.

There were reports of IndianHotels and ITC Hotels pitching for this property. There are reports that Indian Hotels would be taking over the hotel from the Kirloskars and the deal could be finalised after the EGM approval. At its board meeting held on January 20, the board of directors of the company decided that `in view of the increasing competition and the marginal profitability the company has had for over three decades, it was desirable to explore the possibility of the sale of the whole or substantial undertaking of the company.

Meanwhile, the PIH has posted a profit of Rs 18.20 lakhs on net sales of Rs 498.60 lakhs for the quarter ending December 31, 1998. During 1997-98, PIH had made a net profit of Rs 274.87 lakhs on a sale of Rs 1983.30 lakhs.