"We are planning to set up a separate company for internet services and are looking for a foreign JV partner," ModiCorp managing director Deepak Mohla told PTI.

"Internet is part of telecom and information technology and this is an area where we see good growth coming in the near future," he said.

ModiCorp announced a major restructuring last month by focussing on information technology and telecommunication along with moving out of non-core activities.

Mohla said the new focus areas of ModiCorp include internet services, software development and e-commerce apart from being value-added service provider in the telecommunication sector.

In addition to it, ModiCorp will focus on cellular phone operations where the company is already performing well.

Currently Modi Telstra, a JV between Telstra and ModiCorp, operates cellularservices in Calcutta while Spice Telecom operates cellular services in Karnataka and Punjab.

Spice Telecom is a JV between ModiCorp, Motorola and Distacom.

Mohla said as part of the restructuring exercise, ModiCorp would enter into new JVs. In order to fund new ventures, Mohla said ModiCorp would be come out with an IPO in the current fiscal.

He said ModiCorp is in talks with various merchant bankers for the size and amount of the public offer.

ModiCorp has paid-up capital of Rs 54 crore which is held by BK Modi and some non-resident Indians (NRIs).

"We have to look at the appropriate time and environment for IPO in order to get the fair value for the share," Mohla said.

He said over the period, the stake of BK Modi would be diluted in ModiCorp and IPO is the right way for it.

ModiCorp is primarily engaged in investments in various JVs. Some of the JV companies of ModiCorp include Modi Xerox, Modi Olivetti, Modi GBC, Modi Telstra, Modi Rubber, Modicom Network, Graphtech India Ltd, ModiInternational Paper, Modi Rubber and MX Software Services.

Mohla said ModiCorp would also divest its stake in various non-core ventures like Modi Rubber and Modi International Paper.

The company has already sold its 49 per cent in Alcatel Modi Network Systems to the French company Alcatel for Rs 35 crore.