Description

Tata Mutual Fund announces merger of Tata Equity Savings Fund into Tata Balanced Advantage Fund with record date of February 20, 2026, providing 30-day exit option to unitholders.

Summary

Tata Mutual Fund has 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 by Trustees of Tata Mutual Fund under SEBI (Mutual Funds) Regulations, 1996, Regulation 18(15A)
  • Record date: February 20, 2026
  • Effective date: February 21, 2026
  • 30-day exit option available at prevailing NAV without exit load for unitholders of both schemes
  • Sale of units (including switch-in and SIP registration) 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
  • Systematic investment facilities (SIP/STP/SWP) will continue automatically in the surviving scheme if exit option not exercised
  • No entry load for units allotted in Tata Balanced Advantage Fund
  • Written communication will be sent to all unitholders with merger details, tax implications, and financial information

Regulatory Changes

The merger is conducted in accordance with Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996, which mandates providing exit options to unitholders during scheme mergers.

Compliance Requirements

For Unitholders of Tata Equity Savings Fund (Merging Scheme):

  • Must decide on exit option by February 20, 2026 (until 3:00 PM)
  • If no redemption/switch request received, units will automatically merge into Tata Balanced Advantage Fund
  • New account statement will be issued post-merger
  • Unitholders not exercising exit option deemed to have consented to the merger

For Unitholders of Tata Balanced Advantage Fund (Surviving Scheme):

  • May exercise exit option if not in favor of merger
  • If no exit taken, will continue to hold existing units

For Tata Asset Management:

  • Process all redemption/switch requests received during exit period
  • Issue fresh account statements to unitholders post-merger
  • Continue processing SIP/STP/SWP registrations under surviving scheme for non-exiting investors

Important Dates

  • January 19, 2026: Sale of units in Tata Equity Savings Fund suspended
  • January 22, 2026: Exit option period begins
  • February 20, 2026: Exit option period ends (until 3:00 PM) - Record date for merger
  • February 21, 2026: Effective date of merger - Tata Equity Savings Fund ceases to exist

Impact Assessment

Market Impact:

  • Consolidation reduces number of schemes in Tata Mutual Fund family
  • Investors in Tata Equity Savings Fund will be transitioned to a dynamic asset allocation strategy
  • No impact on BSE StAR MF platform operations beyond administrative processing

Investor Impact:

  • High impact on Tata Equity Savings Fund unitholders who must actively decide on exit option within 30 days
  • Automatic conversion if no action taken - passive acceptance mechanism
  • Change in investment strategy from equity savings to balanced advantage (dynamic asset allocation)
  • Continuity of systematic investment plans without fresh registration if exit not exercised
  • No exit load waiver ensures cost-free exit for dissenting investors
  • Tax implications to be communicated separately in written communication

Operational Impact:

  • Suspension of new investments in Merging Scheme from January 19, 2026
  • Administrative processes for unit conversion, account statement generation, and communication to all unitholders
  • Automatic migration of SIP/STP/SWP facilities to surviving scheme

Impact Justification

High impact scheme merger affecting all unitholders of Tata Equity Savings Fund with mandatory action period and automatic conversion. Investors must decide on exit option within 30 days.