Homegrown auto major Tata Motors Ltd (TML) on Friday said it has received approval of the National Company Law Tribunal (NCLT) Mumbai bench to hive off its passenger vehicles business unit into a separate entity.

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Earlier in March this year, the shareholders of the company at an extraordinary general meeting convened as per an order of the NCLT had voted and approved the transfer of the passenger vehicles business unit to TML Business Analytics Services Ltd as a going concern on a slump sale basis for a lump sum consideration.

Subsequently, the matter moved back to the NCLT for a final order.

"We are pleased to inform you that, the Hon'ble NCLT vide its order dated August 24, 2021, has sanctioned the said scheme," Tata Motors said in a regulatory filing.

The company will be filing the said order along with a copy of the scheme with the Registrar of Companies, Mumbai within 30 days of the date of receipt of the order, it added.

Tata Motors had said that its passenger vehicles business unit has been valued at Rs 9,417 crore.

Last year, Tata Motors had announced that it would turn its domestic PV business unit into a separate entity and seek a strategic partnership in order to help the unit secure its long-term viability.

The company's management has so far stated that it has not taken a decision on a partner.

Tata Motors has maintained that as part of an overall business reorganisation plan and in order to provide for the optimum running, growth and development of the PV undertaking and its interests, it was necessary to realign the PV business.

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This shall help in providing differentiated focus for the PV and commercial vehicle businesses separately and help each of them realise their potential while also unlocking business value and enhanced management focus and operational flexibility in each of the businesses, the company had said.