Recently, there was a new fund offer (NFO) from Capitalmind.
As expected, it came with the usual chatter of “NAV is only ₹10,” “you are getting in early,” and so on.
But this time, something rare happened.
Deepak Shenoy, the founder of Capitalmind, took to Twitter and openly called it out. He said what most people in the mutual fund world never do: that a ₹10 NAV is not a deal, and it does not make the fund any more attractive than one priced at ₹150.
This is not a new problem, actually.
The ₹10 NAV obsession has been around for years. But it is rare to see someone respected in the industry speak about it directly and without any filters.
And to be fair, why would they? If people believe ₹10 means cheap or early entry, then NFOs attract more money. That helps the fund gather assets quickly, which is what everyone wants at the launch stage. So this small misunderstanding serves a purpose, to be honest for the fund house and the fund manager.
But just because something benefits the seller does not mean it should be left uncorrected. Especially when it misleads lakhs of new investors. It is time to talk about this myth for what it is and why thinking of NAV like a stock price is one of the easiest ways to go wrong with mutual funds.
The Math Behind NAV Is Simple. And Why It Is Easy to Miss.
Let us take a pause here and walk through some basic numbers.
Assume there are two mutual funds.
One has a NAV of ₹10. The other has a NAV of ₹100.
You invest ₹10,000 in each.
- In the ₹10 NAV fund, you get 1,000 units.
- In the ₹100 NAV fund, you get 100 units.
Now, imagine both funds grow by 20 percent over the next year.
- The ₹10 fund’s NAV becomes ₹12.
- The ₹100 fund’s NAV becomes ₹120.
Now multiply:
- 1,000 units × ₹12 = ₹12,000
- 100 units × ₹120 = ₹12,000
Your investment value is the same in both cases. It has grown from ₹10,000 to ₹12,000. It does not matter how many units you have, or what the NAV was when you started. What matters is the percentage by which the value grows. And that depends entirely on what the fund is investing in.
Let us push this further.
Say there is a third fund with NAV ₹1,000. You will get only 10 units, but if that grows by 20 percent, the NAV becomes ₹1,200 and again your ₹10,000 becomes ₹12,000. The math works the same way, every time.
This is why the NAV figure by itself means very little.
It is just a number that tells you what one unit of the fund is worth. It is like dividing a pizza into 4 slices or 12. You can cut it however you want but the total size of the pizza stays the same. Just because you have more slices in one version does not mean you have more food.
Why This Myth Refuses to Die
You might wonder if the math is this simple, why do so many people still believe that a lower NAV means something better?
The reason is part psychology, part habit, and part marketing.
We are all conditioned to look at prices.
Lower usually feels better. In supermarkets, we reach for the ₹99 sticker instead of ₹129. When booking flights, we sort by “cheapest first.” When we buy more of something at a lower price, it feels like value.
So when people see a mutual fund priced at ₹10 and another at ₹150, they carry that same instinct forward. It feels like the ₹10 fund has more room to grow. That feeling is natural. But it is misplaced.
The second reason is that no one in the industry really wants to challenge it openly.
And this is where things get complicated.
Mutual fund houses launch New Fund Offers (NFOs) every now and then. These are brand new funds, usually offered at ₹10 per unit.
Now imagine a fund manager coming on stage and saying, “By the way, ₹10 does not mean you are getting it cheap. It does not matter at all.” That would be honest but it would also make the fund harder to sell.
If people stop associating ₹10 with “getting in early,” then fewer investors might show up. And when fewer investors join, the fund collects less money. That affects the size and potential of the fund from day one. Basically, affecting the fund manager’s appraisal or bonus.
So instead, the messaging stays vague.
Brochures say things like “available at ₹10 NAV for a limited time” and never clarify that ₹10 is just a number with no advantage. It sounds urgent. It sounds like a special deal. And people simply respond to that. Especially first-time investors who have never been told otherwise.
Even advisors and agents sometimes avoid correcting this belief. Why create friction with the client when the money is already flowing in? The result is a strange silence. No one is exactly lying but no one is fully clarifying either.
The third reason is that it sounds good in conversations.
Imagine telling your friend, “I bought a new fund and got in at ₹10 NAV.” It feels like a smart move. Like you are early. Like you have caught something before it becomes big. But when that idea spreads without explanation, it becomes a trap. One person says it to another, and soon it becomes a rule that everyone believes, without checking whether it actually makes sense.
That is why this myth lives on.
But just because something is popular does not mean it is correct. Especially when your hard-earned money is involved.
What to Actually Look at Before Investing in an NFO (And It Is Also Okay to Walk Away)
Let us say a new mutual fund offer is launched. The NAV is ₹10 and some influencer is trying hard to pitch you that fund. And it feels like you might be left behind if you ignore it.
But before you act, take a few minutes to pause and think. Here is what you can check before making that decision.
1. Who is managing the fund, and what have they done in the past?
Would you trust someone with your savings if you had no idea who they were or what they had done? Then why treat fund managers any differently?
Take two minutes to search their name. See if they have managed other funds before. Look at how those funds have performed over a cycle. If they are new, check who is backing the fund. You may not find all the answers, but you will begin to see whether the person behind the fund is experienced or just present.
2. What is the fund planning to invest in?
Every fund is supposed to share a basic summary of its investment plan. Is it going to focus on large companies? Is it a sector fund? Is it investing abroad? Read it once. Try to say it back to yourself in one line. If you cannot, that is a signal to wait.
You do not need to understand every detail, but you should know what the fund is doing with your money.
3. Is this new fund really offering something that does not already exist?
India already has hundreds of mutual funds. Most of them are well-run, with real portfolios and long-term track records.
So before investing in a new fund, ask: is this offering something different? Or is it just a fresh launch with no real edge? A new fund is not automatically better. It is just newer.
4. Why do you want to invest in this fund?
This is where things often become clear. Are you investing because your friend shared a link? Or because someone said it is “only ₹10” and you may not get this chance again? Now imagine if this same fund had launched at ₹97. Would you still consider it? If not, then maybe you were more interested in the price than the idea.
5. What happens after you invest?
An NFO collects money first. Then it starts investing. This process can take a few weeks.
During that time, your money is simply parked. In some cases, the fund may hold cash for longer before finding the right opportunities. You may not see movement or growth immediately. That is how most new funds work in the beginning. You should be prepared for that.
Now let me say something important.
It is also completely okay to walk away from an NFO.
You do not have to invest just because a fund is new or available for a limited time. Missing an NFO is not the same as missing an opportunity. Most of the successful mutual funds today were once ignored at launch. And many funds that created noise in their early days disappeared later.
The idea that you must get in “early” is just a feeling.
If a fund matches your goals, is run by people you trust, and has a clear strategy then sure, go ahead. If not, it is better to wait. You can always invest later. Mutual funds are not one-time sales. They are for the long-term.
Choosing not to invest right away is not a failure. Sometimes, it is the most careful and mature thing you can do.
Final Thought
Do not let a ₹10 NAV push you into a decision. You deserve more than just urgency and packaging.
Look deeper. Ask honest questions. And remember that your money grows not just by reacting, but by choosing investment options wisely.
If a fund makes sense to you, invest. If it does not, close the tab and go have your tea.
Author Note
Note: This article relies on data from fund reports, index history, and public disclosures. We have used our own assumptions for analysis and illustrations.
The purpose of this article is to share insights, data points, and thought-provoking perspectives on investing. It is not investment advice. If you wish to act on any investment idea, you are strongly advised to consult a qualified advisor. This article is strictly for educational purposes. The views expressed are personal and do not reflect those of my current or past employers.
Parth Parikh has over a decade of experience in finance and research. He currently heads growth and content strategy at Finsire, where he works on investor education initiatives and products like Loan Against Mutual Funds (LAMF) and financial data solutions for banks and fintechs.