Kolkata: The Union Government’s recent Budget announcement has set the stage for a surge in disposable incomes, creating a strong enabler for India’s consumption growth story. With zero tax liability on income up to ₹12.75 lakh or salaried individuals under the new tax regime (effective FY26), Indian consumers will have more spending power, fuelling demand across various sectors. This presents a unique investment opportunity as our economy’s consumption-driven growth story gains momentum.
Recognizing this shift, Tata AIA Life Insurance (Tata AIA)—one of India’s leading life insurers — has introduced two contextual funds targeting different consumer segments:
A) Tata AIA Life Tax Bonanza Consumption Fund: Through this specially curated fund, consumers can not only capitalize on the rising consumption trends but also ensure financial security for their loved ones. Thus, the fund offers the dual advantage of wealth creation and financial security.
B) Tata AIA Life Tax Bonanza Consumption Pension Fund: Exclusively available through Tata AIA’s unit-linked pension solution, this fund is perfect for those looking to grow their savings after retirement. Designed to offer long-term growth, it helps you build a robust retirement fund that can provide financial stability and peace of mind for the years ahead.
Both the New Fund Offers (NFO) will be available from 24th to 31st March 2025, with units priced at ₹10 each.
Why Now is the Ideal Time
India’s Consumption Boom is Here to Stay – India’s consumption landscape is undergoing a paradigm shift, driven by rising incomes, urbanization, and evolving consumer preferences. The recent tax reforms have further accelerated this trend, putting more money in the hands of consumers and sparking demand across sectors like FMCG, retail, e-commerce, and automobiles.
Several factors are driving India’s consumption boom:
- Rising Disposable Incomes: As the middle class expands, more money is flowing into consumer spending across sectors like FMCG, retail, e-commerce, automobiles etc. This growth is a clear indicator of India’s economic strength.
- Demographic Dividend: With over 50% of its population under 25, India is benefiting from a youthful workforce that is driving the country’s consumer boom. The growing working-age population boosts disposable income and spurs demand for a wide range of products and services.
- Favourable Tax Reforms: The tax relief announced in the Union budget 2025 will facilitate higher purchasing power, particularly in urban and semi-urban areas, fuelling discretionary spending and premiumization trends.
- Shifting Consumer Behaviour: Today’s consumers are prioritizing experiences over saving, embracing exclusivity, online shopping, digital services etc. This shift is reshaping the consumption landscape in India.
- Booming Sectors: The e-commerce, quick-commerce, and premium or luxury goods sectors are experiencing robust growth. For example, according to RedSeer Consulting, the Indian quick commerce market, which was valued at around $1.1 billion in 2021, is projected to reach $12 billion by 2028. This represents a CAGR of approximately 30-35% during this period.
The Tata AIA Life Tax Bonanza Consumption Fund and Tata AIA Life Tax Bonanza Consumption Pension Fund are strategically designed to capitalize on these trends, investing in companies poised to benefit from India’s evolving consumption patterns.
Harshad Patil, Chief Investment Officer at Tata AIA Life, explains: “India’s consumption patterns are evolving rapidly, driven by urbanization, rising incomes, and a shift towards premium products and services. The Tata AIA Life Tax Bonanza Consumption Fund & Tata AIA Life Tax Bonanza Consumption Pension Fund are designed to help young and middle-aged investors to benefit from this dynamic growth, offering an opportunity to grow wealth while also enjoying the tax advantages the fund offers.”
Harjeet Sethi, Managing Partner Business Associate, Tata AIA, added, “What excites me most about these new funds is their perfect timing. As India’s consumption landscape evolves with rising disposable incomes and changing consumer preferences, the Tata AIA Life Tax Bonanza Consumption funds allow investors to capitalize on these trends while simultaneously planning for their financial future. It’s about making smart choices today for a secure tomorrow.”
Key fund details
These two funds aim to generate long-term capital appreciation through a diversified portfolio of companies benefiting from India’s growing consumption.
- Investment Focus: Companies poised to benefit from India’s domestic consumption growth story.
- Asset Allocation: 60%-100% in equity and equity-related instruments, 0%-40% in cash & money market securities
- Risk Profile: Designed for long-term capital appreciation with a calculated risk approach.
- Life Insurance Protection: Beyond wealth creation, consumers can secure their families’ financial future with life cover.
Key sectors of focus include:
- FMCG: Companies driving growth through essential and discretionary consumer products.
- Retail & E-commerce: Benefiting from the rapid rise of online shopping and digital transactions.
- Automobiles & Premium Goods: As disposable incomes increase; consumers are shifting towards premium products.
Why are the new funds a Game-Changer
The Tata AIA Life Tax Bonanza Consumption Fund and Tata AIA Life Tax Bonanza Consumption Fund stands out as a smart investment option by offering broad exposure to India’s consumption boom. Unlike concentrated thematic funds, this active multi-cap fund invests across a wide range of sectors, ensuring stability and relevance regardless of economic conditions. By including both cyclical and defensive industries, the fund is business cycle agnostic, making it resilient through market fluctuations.
Customers can expect:
- Exposure to India’s Consumption Growth: Tapping into sectors benefiting from higher disposable incomes and economic expansion.
- A Changing Consumption Mindset: Capitalizing on evolving spending habits, including the rise of digital consumption and experiences.
- Strategic Diversification: Investments in large-cap, mid-cap, and small-cap companies balancing stability and growth potential.
- Long-Term Wealth Creation: Aiming for capital appreciation by investing in companies thriving in India’s consumer economy.
- Tax-Optimised- Investment: Leveraging the benefits of India’s revised income tax regime for enhanced returns.
Investment in Tax Bonanza Consumption Fund:
Consumers can invest in the fund and be part of India’s consumption-driven success story. The fund is available with the following Tata AIA solutions: Tata AIA Shubh Muhurat, Tata AIA Shubh Fortune, Tata AIA Param Raksha Life Pro+, Tata AIA Param Raksha Life Pro, Tata AIA Param Raksha Life Growth+, Tata AIA Param Raksha Life Advantage+, Tata AIA Param Raksha Life Maxima+, Tata AIA Pro-Fit and Tata AIA Premier SIP.
Investment in Tax Bonanza Consumption Pension Fund:
Equity funds have the potential to generate higher returns in the long term that can help pension policyholders plan for their long-term liabilities and improve their purchasing power. This fund is exclusively available with Tata AIA’s unit-linked pension solution, Smart Pension Secure Plan, which enables consumers to build a robust retirement fund in a smart way with long-term growth potential.
Proven Performance of Tata AIA Funds
Tata AIA’s funds have consistently delivered strong, long-term returns, making them a preferred choice for investors seeking growth, stability, and protection. Backed by expert fund management and a disciplined investment strategy, Tata AIA funds have successfully navigated market cycles while maximizing wealth creation for policyholders.
This track record of robust performance underscores Tata AIA’s commitment to offering investment solutions that align with India’s evolving economic landscape, ensuring investors can capitalize on emerging opportunities with confidence.
| Last 5 Years Returns* (CAGR) | ||
| Tata AIA Funds | Fund Return (%) * | Benchmark Return (%) * |
| Multi Cap Fund | 23.87% | 15.98% |
| Top 200 Fund | 24.31% | 15.98% |
| India Consumption Fund | 22.47% | 15.98% |
*Data as of February 28, 2025. Past performance is not indicative of future performance.
Fund Benchmark: Multi Cap Fund, India Consumption Fund, Top 200 Fund: S&P BSE 200.
Inception Dates: Top 200 Fund: 12 Jan 2009, Multi Cap Fund: 05 Oct 2015, India Consumption Fund: 05 Oct 2015.
Harjeet Sethi, Managing Partner Business Associate, Tata AIA, added, “What excites me most about these new funds is their perfect timing. As India’s consumption landscape evolves with rising disposable incomes and changing consumer preferences, the Tata AIA Life Tax Bonanza Consumption funds allow investors to capitalize on these trends while simultaneously planning for their financial future. It’s about making smart choices today for a secure tomorrow.”
About Tata AIA Life
Tata AIA Life Insurance Company Limited (Tata AIA) is a joint venture Company formed by Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA). Tata AIA Life combines Tata’s pre-eminent leadership position in India and AIA’s presence as the largest, independent listed pan-Asian life insurance group in the world, spanning 18 markets in the Asia Pacific region. Tata AIA reported a total Premium Income of INR 25,692 crore for FY24, up 25% from FY23. The Company continues to rank among the Top 3 Private Insurers in Individual Weighted New Business Premium (IWNBP) with an IWNBP income of INR 7,413 crore. The Individual Death Claims Settlement ratio improved to 99.13%. The Company also achieved industry-leading Persistency performance (based on premiums), ranking #1 in four out of five cohorts.
About the Tata Group
Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise, headquartered in India, comprising 30 companies across ten verticals. The group operates in more than 100 countries across six continents, with a mission ‘To improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust’.
Tata Sons is the principal investment holding company and promoter of Tata companies. Sixty-six percent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation, art, and culture.
In 2023-24, the revenue of Tata companies, taken together, was more than $165 billion. These companies collectively employ over 1 million people.
Each Tata company or enterprise operates independently under the guidance and supervision of its own board of directors. There are 26 publicly listed Tata enterprises with a combined market capitalisation of more than $365 billion as on March 31, 2024.
About AIA
AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets – wholly-owned branches and subsidiaries in Mainland China, Hong Kong SAR (1), Thailand, Singapore, Malaysia, Australia, Cambodia, Indonesia, Myanmar, New Zealand, the Philippines, South Korea, Sri Lanka, Taiwan (China), Vietnam, Brunei and Macau SAR (2), and a 49% joint venture in India. In addition, AIA has a 24.99% shareholding in China Post Life Insurance Co., Ltd.
The business that is now AIA was first established in Shanghai more than a century ago in 1919. It is a market leader in Asia (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$286 billion as of 31 December 2023.
AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia, AIA serves the holders of more than 42 million individual policies and over 18 million participating members of group insurance schemes. AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock codes “1299” for HKD counter and “81299” for RMB counter with American Depositary Receipts (Level 1) traded on the over-the-counter market under the ticker symbol “AAGIY”.
