Description

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

Summary

Tata Mutual Fund Trustees have approved the merger of Tata Equity Savings Fund (Merging Scheme) into Tata Balanced Advantage Fund (Surviving Scheme), an open-ended dynamic asset allocation fund. The record date for the merger is February 20, 2026, and the effective date is February 21, 2026. Unitholders of both schemes are provided a 30-day exit option without exit load from January 22, 2026 to February 20, 2026. Sale of units in the Merging Scheme will be suspended from January 19, 2026.

Key Points

  • Merger approved in accordance with SEBI (Mutual Funds) Regulations, 1996, Regulation 18(15A)
  • Record date: February 20, 2026
  • Effective date: February 21, 2026
  • Exit option period: January 22, 2026 to February 20, 2026 (30 days)
  • Exit available at prevailing NAV without exit load for both schemes
  • Sale of units in Tata Equity Savings Fund suspended from January 19, 2026
  • Units will be allotted at closing NAV of record date
  • All plan options (Direct/Regular, Growth/IDCW Payout/IDCW Reinvestment) will be mapped to corresponding options in surviving scheme
  • No entry load on allotted units in Tata Balanced Advantage Fund
  • Systematic investment facilities (SIP/STP/SWP) will continue automatically in surviving scheme if unitholders don’t exit

Regulatory Changes

No new regulatory changes introduced. Merger conducted as per existing SEBI (Mutual Funds) Regulations, 1996, Regulation 18(15A) which mandates 30-day exit option at prevailing NAV without exit load for unitholders of both merging and surviving schemes.

Compliance Requirements

For Tata Asset Management:

  • Send written communication to all unitholders of both schemes with merger details, basis of unit allocation, tax implications, and financial information
  • Issue fresh Account Statements to unitholders post-merger on effective date
  • Process automatic unit allotment for unitholders who don’t exercise exit option
  • Continue processing existing SIP/STP/SWP registrations in surviving scheme from effective date

For Unitholders:

  • Review merger notice and decide whether to exercise exit option
  • Submit redemption/switch request by February 20, 2026 (up to 3:00 PM) if opposing merger
  • No action required if agreeing to merger - units will be automatically converted

Important Dates

  • January 19, 2026: Sale of units (including switch-in and SIP registrations) suspended in Tata Equity Savings Fund
  • January 22, 2026: Exit option period begins
  • February 20, 2026:
    • Record date for merger
    • Exit option period ends (redemption/switch requests until 3:00 PM)
    • Last date to submit redemption request to avoid automatic merger
  • February 21, 2026: Effective date of merger - Tata Equity Savings Fund ceases to exist

Impact Assessment

For Unitholders of Tata Equity Savings Fund:

  • Will automatically become unitholders of Tata Balanced Advantage Fund unless exit option exercised
  • Scheme characteristics will change from equity savings fund to dynamic asset allocation fund
  • Investment strategy and risk profile may differ between schemes
  • No financial loss from merger itself as units allotted at NAV without loads
  • Tax implications need to be reviewed based on individual circumstances

For Unitholders of Tata Balanced Advantage Fund:

  • Can continue holding existing units without change
  • Fund size will increase due to incoming assets from merged scheme
  • May affect fund management dynamics depending on size of incoming assets
  • Exit option available if unitholders disagree with enlarged fund structure

Market Impact:

  • Consolidation of Tata Mutual Fund scheme offerings
  • No direct impact on stock market operations
  • Limited to investors in these specific mutual fund schemes on BSE StAR MF platform

Impact Justification

Affects unitholders of two Tata Mutual Fund schemes with mandatory action required for those opposing merger. Limited to specific fund investors but provides adequate exit window.