Description

TATA Mutual Fund will merge Tata Equity Savings Fund into Tata Balanced Advantage Fund effective February 21, 2026, with a 30-day exit window without load for unitholders.

Summary

NSE has notified members about the merger of Tata Equity Savings Fund (Merging Scheme) into Tata Balanced Advantage Fund (Surviving Scheme) effective February 21, 2026. The merger has been approved by TATA Mutual Fund trustees in accordance with SEBI (Mutual Funds) Regulations, 1996. Unitholders who do not wish to continue can exit without load during the 30-day window or switch to other TATA Mutual Fund schemes.

Key Points

  • Tata Equity Savings Fund will merge into Tata Balanced Advantage Fund (an open-ended dynamic asset allocation fund)
  • Merger effective date: February 21, 2026
  • Record date for merger: February 20, 2026
  • 30-day exit window without exit load provided to unitholders of both schemes
  • Exit window period: January 22, 2026 to February 20, 2026 (both days inclusive)
  • No inflows allowed in merging scheme from January 19, 2026
  • Unit allotment at closing NAV of record date
  • Existing SIP/XSIP/SWP will continue during exit load period
  • All SIP/STP/SWP arrangements will transfer to surviving scheme from February 21, 2026
  • Merging scheme will cease to exist after merger completion

Regulatory Changes

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

Compliance Requirements

  • NSE members must inform investors about the merger details
  • Investors not in favor of the merger can redeem investments or switch to other TATA Mutual Fund schemes without exit load during the 30-day window
  • TATA Mutual Fund will send written communication to unitholders of both schemes with merger details, basis of unit allocation, tax implications, and financial information
  • Platform to suspend new subscriptions in Tata Equity Savings Fund from January 19, 2026
  • Platform to continue processing existing SIP/XSIP/SWP during exit period
  • Platform to transfer all registered SIP/XSIP/STP/SWP to surviving scheme on February 21, 2026

Important Dates

  • January 16, 2026: Circular date, notification to members
  • January 19, 2026: Sale of units (including switch-in and SIP registration) suspended in Tata Equity Savings Fund
  • January 22, 2026: Start of 30-day exit load waiver period
  • February 20, 2026: End of exit load waiver period; record date for merger
  • February 21, 2026: Merger effective date; Tata Equity Savings Fund ceases to exist; all SIP/STP/SWP shift to surviving scheme

Impact Assessment

Investor Impact: Unitholders of Tata Equity Savings Fund will automatically become unitholders of Tata Balanced Advantage Fund unless they choose to exit during the 30-day window. Units will be allotted based on closing NAV of the record date, ensuring fair valuation.

Operational Impact: The merger will consolidate two schemes, potentially improving operational efficiency for the fund house. Investors with systematic plans will see continuity of their arrangements, with automatic transfer to the surviving scheme.

Market Impact: Limited broader market impact as this is a scheme-specific consolidation within TATA Mutual Fund. The surviving scheme (Tata Balanced Advantage Fund) is a dynamic asset allocation fund that will absorb the assets and unitholders of the equity savings fund.

Tax Implications: Written communication to unitholders will detail specific tax implications of the merger, as scheme mergers may have tax consequences for investors depending on their holding period and investment structure.

Impact Justification

Scheme merger affects existing investors in Tata Equity Savings Fund with 30-day exit option provided. Impacts ongoing SIP/STP/SWP arrangements but follows standard merger procedures.