ETF Pricing: NAV, iNAV & Fair Value Explained

14 Apr 2026|

2 min read |

by ICICI Securities Team

Understanding ETF Pricing

ETFs are often praised for being transparent and cost effective. Yet when it comes to pricing, things aren’t as straightforward as they seem.

The price at which you buy an ETF directly reflects your returns. Sometimes the demand for certain ETFs exponentially increase their prices.

For example, Gold and Silver were trading at a 5-20% premium when they rallied at the end of 2025. However, when the rally reverses, the prices crash. And then markets enter a phase of correction.

What is the actual fair value of an ETF?

In order to get the fair price of individual stocks, you have to estimate the intrinsic value based on fundamental analysis (based on earnings, growth potential, and financial health). But it gets much simpler with ETFs.

The fair value of an ETF is determined by:

NAV (Net Asset Value) – the actual value at the end of the day

iNAV (Indicative NAV) – the real-time estimated value during market hours

Let’s understand these with an example.

Imagine the ETF as a Café. The Café sells a bunch of products like breads, coffee and cakes. Now, at the end of the day the Café records all the costs to judge the prices of its products to maintain its operation.

Breads	₹50 per piece
Coffee	₹60 per cup
Cakes	₹100 per piece
Total	₹210 per piece

So, the total price of the products (i.e. ₹210) will be the price at which the Café runs. This is the actual value of the products or the Net Asset Value of the ETF.

Now, imagine the Café has to constantly update the prices of the products as the price of electricity, milk and sugar keeps changing. As these costs fluctuate, the estimated value of the Café’s offerings also changes slightly (let’s say, ₹205, ₹215, and so on). This is similar to iNAV, which is the real-time estimated value of the ETF during market hours, based on changes in the prices of its underlying assets (like stocks in the index).

Ideally, the price of the ETF should be close to the NAV or iNAV of the ETF. But if the demand of the products of the café suddenly shoots up, the café owner may decide to increase the price to earn more profit.

Premium: when price of ETF > NAV (the ETF is in demand and the customers are willing to pay more to buy the ETF)

Discount: when price of ETF < NAV (the ETF is not in demand and the customers are requesting a discount to buy the ETF)

Why are NAV and iNAV important?

Seasoned investors refer to both of these prices acting as a compass for fair pricing when investing in ETFs.

They help you answer a very simple question:

“Am I paying the right price for this ETF”

Where can I check the NAV and iNAV of an ETF?

At the end of day, the AMC declares the NAV of the ETF and this is a public information. Your broker, AMC website or even a google search can reveal the NAV of the ETF.

iNAV can be checked on the NSE website as all AMCs send the data on a periodic basis.

Final Thought

NAV and iNAV don’t tell you if an ETF will go up or down tomorrow, but it tells you exactly what it's worth right now. So, next time you buy an ETF ask yourself this:

Are you relying blindly on the market price, or are you using NAV and iNAV to understand what the ETF is truly worth before making your move?

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

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