"As a separate organisation, our customers will see us as a focused IT company. To that extent the focus comes in and all the synergy comes in," ITC's information system division chief executive Sanjay Verma said.

He said the new subsidiary would merge the information services division along with ITC's UK-based subsidiary ITC Infotech Ltd.

ITC Infotech's subsidiary in the United States will also be merged with the new subsidiary, Verma said.

The move to spin off the business as a separate company was taken by ITC's board on Wednesday.

"We have intimated the stock exchanges about the board clearing a proposal to seek shareholders' approval to restructure this business as a subsidiary company," ITC's head of corporate communications SH Venkatramani said. A statement from ITC said that the company's IT business had realigned its portfolio to focus on growth areas. "It is gearing up for a strong thrust into e-commerce software solutions, which will complement its existing business lines of ERP, groupware and client server technologies."

On Monday, ITC Infotech signed an agreement with Compaq India for joint efforts to explore opportunities in depolying e-enabled solutions.

In February, British e-commerce group Infobank International Holdings Plc said it had entered an agreement with Indian conglomerate ITC Ltd to provide business web services.

In March, ITC Infotech also signed a wide-ranging agreement with ExpandIT of Denmark for software products.

The main business of ITC, 31.7 per cent owned by British American Tobacco Plc, is tobacco. It also has interests in hotels and agri-products.