Description

Tata Mutual Fund announces merger of Tata Equity Savings Fund into Tata Balanced Advantage Fund with record date of February 20, 2026, and 30-day exit option for unitholders without exit load.

Summary

Tata Mutual Fund has announced the merger of Tata Equity Savings Fund (Merging Scheme) into Tata Balanced Advantage Fund (Surviving Scheme) with a record date of February 20, 2026. The sale of units in the Merging Scheme will be suspended from January 19, 2026. Unitholders of both schemes are provided a 30-day exit option from January 22 to February 20, 2026 at prevailing NAV without exit load. The effective date of merger is February 21, 2026, after which Tata Equity Savings Fund will cease to exist.

Key Points

  • Merger of Tata Equity Savings Fund into Tata Balanced Advantage Fund approved by Trustees
  • Record date for merger: February 20, 2026
  • Exit option period: January 22, 2026 to February 20, 2026 (30 days)
  • Exit available at prevailing NAV without any exit load for unitholders of both schemes
  • Sale of units in Merging Scheme suspended from January 19, 2026
  • Units will be allotted in Surviving Scheme based on closing NAV of record date
  • All plan options (Direct/Regular, Growth/IDCW Payout/IDCW Reinvestment) will be mapped to corresponding options
  • Systematic investment facilities (SIP/STP/SWP) will continue in Surviving Scheme without fresh registration
  • Effective date of merger: February 21, 2026

Regulatory Changes

This merger is conducted in accordance with Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996, which mandates a 30-day exit option at prevailing NAV without exit load for unitholders of both merging and surviving schemes.

Compliance Requirements

  • Written communication to be sent to unitholders of both schemes with merger details, basis of unit allocation, tax implications, and financial information
  • Unitholders must submit redemption/switch requests by February 20, 2026 (up to 3:00 PM) if they wish to exit
  • Fresh account statements will be issued to unitholders post-merger
  • Fund house must provide exit option without exit load during the specified period
  • No entry load will be charged for units allotted in the Surviving Scheme

Important Dates

  • January 19, 2026: Sale of units (including switch-in and SIP registrations) in Tata Equity Savings Fund suspended
  • January 22, 2026: Exit option period begins
  • February 20, 2026:
    • Record date for merger
    • Last date to exercise exit option (up to 3:00 PM)
  • February 21, 2026: Effective date of merger; Tata Equity Savings Fund ceases to exist

Impact Assessment

Market Impact: Low - This is a fund consolidation exercise with no direct impact on equity or debt markets.

Investor Impact: Medium - Existing unitholders of Tata Equity Savings Fund will be transitioned to Tata Balanced Advantage Fund unless they opt for exit. The 30-day exit window provides adequate time for investors to evaluate and decide. Investors who remain will see their holdings automatically transferred to a dynamic asset allocation fund with potentially different risk-return characteristics.

Operational Impact: Unitholders who do not exit will automatically become unitholders of Tata Balanced Advantage Fund. Existing SIP/STP/SWP registrations will continue seamlessly in the Surviving Scheme without requiring fresh registration, minimizing operational disruption for investors who choose to stay invested.

Impact Justification

Scheme merger affects existing unitholders of both funds with mandatory exit option period, but is a routine fund consolidation activity with no adverse market impact