India-based Appu Hotels is to launch an initial public offering by 2012 to support its Rs500bn ($110m) expansion plan.

Le Royal Meridien chairman Palani G Periasamy said the company plans to double its capacity in the five-star category from its current 500 rooms.

The hotel group will also set up three more five-star hotels, including a second property in Chennai and two in other parts of the state of Tamil Nadu through debt, internal accruals and from the proceeds of the proposed IPO.

The launch may include a five-star hotel in Puducherry and a resort hotel with 100 rooms on the East Coast Road near Chennai, according to

The company owns two five-star hotels: Hotel Le Royal Meridien in Chennai and the 255-room Le Meridien in Coimbatore, which was set up with an investment of Rs3.5bn ($77.3m).