Tata Motors on Tuesday said its board has approved to set up a wholly-owned subsidiary to house commercial vehicles business.

The company has proposed the name of the new unit as TML Commercial Vehicles Ltd (TMLCVL).

The entity is proposed to be a wholly-owned subsidiary of the company, Tata Motors said in a regulatory filing.

In March this year, Tata Motors announced the demerger of its commercial and passenger vehicle segments into two separate listed entities to better capitalise on growth opportunities.

As part of the initiative, the CV business and its related investments would be housed in one entity, while the passenger vehicle business, including electric vehicles, Jaguar Land Rover and its related investments, will come under a separate listed entity.