Mirror of the sky: The Falaknuma Palace hotel

What to see and where to be seen

Once the playground of the world's richest rulers, Hyderabad is historically a hedonistic hideaway. For centuries, the Nizams of Hyderabad ruled over this part of central India known as the Deccan, about the size of Italy. They created a fabulously wealthy cosmopolitan culture based on the mix of Hindu, Mughal and Persian influences during centuries as a major trading centre.

Today the past seems like a distant tale. Hyderabad is now often referred to as "Cyberabad", in honour of its status as an IT hot spot. In the evening you'll find India's upstart brainiacs escaping from their desks in Hi Tec City to hang out in the fashionable watering holes of upmarket Jubilee and Banjara Hills. They'll be downing beers at favourite pubs such as 10 Downing Street (00 91 40 66 62 9323; 10ds.in) in Begumpet, and 1857 (00 91 40 6453 6666; ohris.com) on Necklace Road. They'll be tucking into barbecued kebabs on the rooftop at 36 Chhattees (00 91 40 6458 0000) on Road Number 36; sipping cocktails at Road No.1's Syn (00 91 92 9500 6969; synicious.com) in the Banjara Hills; or flocking to Maharaja Chat Bhandar in Jubilee Hills for spicy local street food favourite golgoppas (puri filled with spicy chickpea and potato).

I'm in town en route to Mumbai and I'm making the most of it. Out under the stars at Aqua (00 91 40 2345 6789; theparkhotels.com) – a chillout lounge overlooking Hussain Sagar Lake at the city's modernist new Park Hotel – bossa nova floats seductively on the balmy air as Hyderabad's bright young things flit past like butterflies. They come to drink and then dance at Kismet, the city's top nightclub, also at the hotel. I find myself being chatted up at the bar by "Ice" Mamidi, a prince of Hyderabad nightlife, replete in black Armani T-shirt and gold chains. "Honey," he drawls, "this place is so happening. So many people are coming from all over and they all want to party."

By 3am the remains of the revellers are staging a last stand in the lobby bar, their laughter echoing as rumpled waiters bring yet another iced bottle of champagne. Heels in hand, I slink off to my comfy bed.

A few hours later, I rally for a picnic in the romantic ruins of the 400-year-old Golconda Fort, then enter into the Arabian Nights fantasy world of the Nizams at the Chowmahalla Palace (00 91 40 2452 2032; chowmahalla.com), once the seat of the dynasty and resplendent with Mughal domes, sparkling marble and dozens of dazzling chandeliers.

But enough culture: it's time to shop. In the Old Town, I feel as if I've stepped back in time. The winding lanes of the bazaar radiate from the mighty 16th-century Charminar gates. As befits the "City of Pearls", I am seduced by a strand of lustrous Hyderabadi gemstones. Iridescent Pochampally silk saris, lacquer bangles and attar, the heady perfume once favoured by Hyderabad's courtesans, also vie for my attention. From a street vendor's clay pot, the mouthwatering scent of the local dish – biryani – rises and reminds me that I'm due to meet friends for dinner at Falaknuma Palace (00 91 40 6629 8585; tajhotels.com).

I summon a taxi and we make our way up to the palace whose name means "mirror of the sky", and which is located on a hill 600m above the city. I'm in for a treat. Once the home of the Nizams, it has been restored as a seriously luxurious heritage hotel.

I arrive in time to hear a group of Sufi Qawwali singers performing and listen while sipping a jasmine martini. Sweeping views provide the backdrop, the lights of the city twinkling between the silhouettes of minarets. The night is rounded off with a royal feast in true Hyderabadi style, courtesy of chef Ashfer Biju's sublime cuisine at Adaa, the fine dining restaurant. Hyderabad's Nizams, with their passionate pursuit of pleasure may be gone, but their radiant past glimmers on.

A Hedonist's Guide to... (Hg2) is a luxury city guide series for the more decadent traveller. For more information, see hg2.com