NAV: Meaning, Definition & Indian Stock Market Examples

Net Asset Value — total assets minus liabilities of a fund, divided by units outstanding.

Disclaimer: This article is for educational purposes only and does not constitute SEBI-registered investment advice. Consult a SEBI-registered investment advisor before making investment decisions.

What is NAV?

Net Asset Value (NAV) is the price at which you buy or sell one unit of a mutual fund. NAV = (Total Assets − Liabilities) ÷ Total Units Outstanding. For equity mutual funds, NAV is declared once daily (after market close). A higher NAV does not mean a fund is expensive — it simply means it has grown more since inception.

NAV — Indian Stock Market Example

An equity fund with NAV of ₹500 is not more expensive to invest in than one with NAV of ₹15 — the return depends on NAV growth rate, not absolute level. Franklin India Prima Fund has some of India's highest NAVs (₹2,000+) simply because it has been around since 1994. New fund offer (NFO) NAV starts at ₹10.

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Frequently Asked Questions about NAV

When is NAV calculated and at what time?

For equity mutual funds, NAV is declared after market close at 3:30 PM IST, typically published by 9–11 PM. If you submit a redemption or purchase request before 3 PM on a business day (cut-off time), you get that day's NAV. After 3 PM, you get next business day's NAV.

Why does a low NAV fund seem attractive but isn't?

Many investors mistakenly prefer low-NAV funds thinking they are "cheap" like low-priced stocks. But NAV is just a unit accounting price — a fund with NAV ₹15 and one with NAV ₹500 can deliver the same returns if they hold the same portfolio. Returns depend on portfolio quality, not NAV level.

Related Terms

Mutual Fund

Pooled investment vehicle professionally managed under SEBI's regulatory framework.

ETF

Exchange-Traded Fund — a basket of securities that trades on a stock exchange like a share.

SIP

Systematic Investment Plan — fixed periodic investments in mutual funds.

AUM

Assets Under Management — total market value of assets managed by a fund or firm.

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