The State Bank of India (SBI), the largest bank in the country, has picked up 19.7 per cent equity in Orissa-based Mayfair Hotels and Resorts (MHRL) through a private equity (PE) deal, for an undisclosed sum.

The group currently has four hotels in the state and plans to use the funds to expand organically and geographically.

The deal was for 37.33 lakh shares with a face value of Rs 10 each. Post-deal, the promoters' share will be 80 per cent.

The decision of SBI to acquire the stake in the leading hospitality player in eastern India in the current difficult market scenario is considered significant.

MHRL has four properties at Bhubaneswar, Puri, Rourkela and Darjeeling and is also opening up a new 5-star deluxe property of Mayfair Gangtok in March. The firm plans to invest Rs 260 crore on its expansion, and plans to raise Rs 65-75 crore in debt for this.

In addition, MHRL is also expected to go for an IPO in 24 to 36 months, and plans to raise upto Rs 150 crore through it. The company is expecting revenues of Rs 60 crore in 2008-09 with net profit of Rs 13 crore this year.