What It Means
NAV (Net Asset Value) is the per-unit value of a mutual fund's holdings, calculated by dividing the fund's total assets minus liabilities by the number of outstanding units. It's the price at which you buy or sell fund units.
How It Works
NAV is declared once a day, after markets close, based on the closing value of every security the fund holds. A common misconception is that a fund with a lower NAV (say ₹15) is "cheaper" or has more room to grow than one with a higher NAV (say ₹150) — it doesn't. NAV is just the value per unit; a ₹10,000 investment buys proportionally more units of the ₹15 fund and fewer of the ₹150 fund, but the actual returns depend entirely on how the fund's underlying holdings perform, not on the starting NAV.
Warning
Choosing a fund because its NAV "looks cheap" compared to another is a common beginner mistake — NAV alone says nothing about a fund's future performance or quality.