On 25 September 2026, the National Stock Exchange issued an unusual warning. It said certain international ETFs traded at a substantial premium to their NAV. Yet the underlying NAVs had stayed broadly stable.
You can read the full NSE press release on international ETFs. NSE asked investors to exercise extreme caution and check the NAV before placing any buy or sell order.
Many people in our community had bought these ETFs without ever looking at the NAV. They saw a price on their trading app, liked the chart and pressed buy.
This guide explains the three numbers every ETF investor should understand: NAV, iNAV and market price. It sits under our pillar on US stocks and ETFs for Indian investors. It may be the most practical page in that cluster.
At Belong, we see this confusion weekly. The fix is simple once you know where to look.
👉 Tip: Never buy an ETF by looking at its price alone. Price tells you what others will pay. NAV tells you what you actually own.
The Short Answer
Here is the quick version before we go deeper.
NAV is the value of everything the ETF owns, per unit, calculated once after the market closes.
iNAV is an estimate of that same value, updated during market hours.
Market price is what buyers and sellers agree on right now, on the exchange.
In a healthy ETF, all three sit close together. When the market price drifts far above NAV or iNAV, you are paying a premium. When it falls below, it trades at a discount.
That gap is the whole story. Everything else in this article explains why it appears and what to do about it.
Who This Guide Is For
If you're a resident Indian, this matters most for international ETFs listed on NSE and BSE. These are the ETFs facing large premiums in 2026.
If you're an NRI, it matters when you buy ETFs abroad, especially smaller or less traded ones. It also matters if you buy Indian ETFs from your NRE or NRO account.
The concepts are identical in both cases. The risks are just bigger in some markets than others.
What Is NAV?
NAV stands for Net Asset Value. It is the value of the ETF's holdings, minus its liabilities, divided by the number of units.
Think of an ETF as a basket. NAV tells you what one slice of that basket is worth, based on the closing prices of everything inside it.
If you want a refresher on the building blocks, our glossary explains an asset and a liability. Our guide to what NAV means covers the mutual fund side in more detail.
How NAV is calculated
The fund house adds up the market value of every security it holds. It adds cash and accrued income, then subtracts expenses and other liabilities.
That total is divided by the number of units outstanding. The result is the NAV per unit.
For an international ETF, there is one extra step. The value of foreign holdings is converted into rupees. So the dollar's appreciation or fall against the rupee also changes the NAV.
When NAV is published
NAV is a once-a-day number. It reflects closing prices of the underlying holdings.
This is why NAV is reliable but slow. By the time you see it, the market has already moved on.
NAV in ETFs vs mutual funds
In a regular mutual fund, you always buy and sell at NAV. The fund house issues or cancels units for you directly.
An ETF works differently for most investors. You buy from another investor on the exchange, at the market price, not at NAV.
That single difference is why ETFs can trade at premiums and discounts while ordinary mutual funds cannot.
What Is iNAV?
iNAV stands for indicative Net Asset Value. Some people call it intraday NAV.
It is a running estimate of what the ETF's holdings are worth during market hours. It gives you a fair value reference while you trade.
AMCs publish it on their websites. Take DSP's ETF scheme documents as an example. They state that the AMC calculates an indicative NAV and updates it online during market hours.
Why iNAV exists
NAV is published only once a day. Without iNAV, you would have no way to judge whether the price you see at noon is fair.
iNAV fills that gap. Comparing the live price with the live iNAV shows you, in real time, whether you are paying a premium.
The iNAV problem with international ETFs
Here is what most blogs miss. For a domestic ETF, the underlying stocks trade at the same time as the ETF, so iNAV stays fresh.
For a US-focused ETF listed in India, the underlying US market is usually closed during Indian trading hours. The iNAV must rely on older prices for the holdings, adjusted for currency.
So the iNAV of an international ETF is an estimate built on stale inputs. It is still useful, but treat it as a guide, not a precise fair value.
👉 Tip: For US-tracking ETFs listed in India, check what happened in the US market overnight. A big US move can make the morning iNAV look misleading.
What Is the Market Price?
The market price is the last price at which the ETF actually traded on the exchange. It moves every second the market is open.
It is driven by demand and supply. If many people want to buy and few want to sell, the price rises. This happens regardless of what the holdings are worth.
You also face a bid-ask spread. The bid is the highest price a buyer offers, and the ask is the lowest price a seller accepts. The gap between them is a cost you pay on every trade.
Why Price and NAV Usually Stay Close
In a well-functioning ETF, the market price rarely strays far from NAV. Two groups make this happen.
Market makers
Market makers are exchange members who keep offering to buy and sell ETF units. Their quotes give the ETF liquidity, so you can trade without moving the price much.
HSBC Mutual Fund's ETF listing disclosure says the AMC appoints at least two market makers. They provide liquidity on an ongoing basis. These market makers offer daily two-way quotes.
Creation and redemption
The second mechanism is quieter but more powerful. Market makers can create new ETF units, or redeem existing ones, directly with the fund house in large blocks.
DSP's scheme document explains that ongoing direct purchases from the fund are restricted to market makers and large investors. They transact in creation unit size.
Here is why that matters. Say the ETF trades above NAV. A market maker can create new units at NAV and sell them at the higher market price.
That extra supply pushes the price back down towards NAV. The reverse happens at a discount.
This arbitrage is the ETF's self-correcting engine. When it works, premiums stay small.
Why International ETFs in India Trade at Big Premiums
Now the important part. The self-correcting engine has broken down for international ETFs in India.
The overseas limit blocks new units
Creating new units of an international ETF means the fund house must invest more money abroad. Indian mutual funds can only invest overseas within limits set by the regulator.
The NSE press release states that these overseas limits are fully utilised. As a result, creation of fresh units in these ETFs is restricted.
With no new units, supply is frozen. Every extra buyer must buy from an existing holder, at whatever price that holder demands.
What this does to price
The ETF starts to behave like a closed-end fund. Its price follows investor demand, not just the value of its holdings.
So the price can rise even on days when the NAV does not. You end up paying for scarcity, not for assets.
Why this premium can vanish suddenly
The NSE release warns that buyers at steep premiums face the risk of an abrupt fall in price. That fall can be unrelated to anything happening in the underlying market.
It names two possible triggers. One is an increase in overseas investment limits. The other is a change to how ETF price bands are set.
The April 2027 change you should know
This is a regulation trigger worth marking in your calendar. SEBI issued a circular on 15 June 2026 on norms for ETF base prices and price bands.
The NSE press release explains the key change. From 1 April 2027, the base price for ETF price bands moves to the previous day's NAV. Once price bands anchor to NAV, it becomes harder for prices to drift far above it.
In simple terms, a rule change can pull the price towards NAV. If you bought at a large premium, that pull works against you.
👉 Tip: If you already hold an international ETF bought at a high premium, do not panic-sell. Review it calmly, compare the current premium with your entry premium, and decide with a plan.
A Worked Example, Without the Jargon
Imagine you live in Pune. Your portfolio is entirely in Indian funds, and you want US tech exposure.
You find a Nasdaq-tracking ETF on your trading app. The chart looks great, so you buy.
What you did not check was the iNAV. The ETF's holdings were worth far less per unit than the price you paid.
Now picture two outcomes. In the first, US tech rises, but the premium shrinks at the same time. Your NAV gains are eaten by the falling premium.
In the second, US tech is flat, and the premium disappears after a rule change. You lose money even though the underlying stocks did nothing.
The point is uncomfortable but important. When you buy at a large premium, part of your future return depends on other buyers, not on the assets.
How to Check NAV, iNAV and Premium Before You Buy
This is the detailed, practical step. It takes about two minutes and can save you a lot.
Find the iNAV.
Check the AMC's website, or your trading terminal if it shows iNAV.Note the live market price.
Use the last traded price, and look at the bid and ask too.Calculate the premium.
Subtract iNAV from price, then divide by iNAV. A positive result is a premium.Compare with history.
Is the current premium higher than usual for this ETF?Check trading volume.
Thinly traded ETFs can show wide gaps and wide spreads.Use a limit order.
Set the maximum price you are willing to pay. Avoid market orders in ETFs.Decide or walk away.
If the premium is large, consider alternatives that transact at NAV.
The NSE release specifically advises verifying NAVs on the stock exchange, the AMFI website or your trading application before ordering. That is the habit to build.
Decision clarity
If the price is close to iNAV → the ETF is behaving normally. Focus on costs and fit.
If the premium is large and rising → pause, and look at routes that price at NAV.
If your timeline is short → avoid buying at a premium entirely. You may not have time for it to normalise.
If you must invest regularly → favour products where every purchase happens at NAV.
Alternatives That Transact at NAV
If the premium on an India-listed international ETF looks too high, you have other routes. Each has its own trade-offs.
Indian international mutual funds
These funds always transact at NAV. The catch is that many have paused fresh subscriptions because of the same overseas limit.
Our guide to the best international mutual funds for Indians covers the category. Our comparison of US stocks vs global mutual funds explains how they differ from direct holdings.
GIFT City mutual funds
For resident Indians, GIFT City funds are invested in US dollars, under LRS. Subscriptions and redemptions happen at NAV, not at an exchange price driven by scarcity.
You can browse options on our GIFT City mutual funds tool. One fund our resident users often study is the DSP Global Equity Fund. For non-US diversification, the Edelweiss Greater China Equity Fund is another example.
Our comparison of GIFT City funds vs international ETFs lays out the differences side by side. If ETFs inside GIFT City interest you, read our guide to GIFT City ETFs.
Direct US-listed ETFs under LRS
You can also buy US-listed ETFs directly through an overseas broker. Large, heavily traded US ETFs have active creation and redemption, so their prices usually track NAV closely.
This route brings its own work: LRS remittances, Schedule FA and US estate tax considerations. Our guide on how to invest in the USA from India walks through it.
For NRIs: What Changes
If you're an NRI in Dubai buying ETFs through an international broker, the premium problem is usually smaller. Large global ETFs have working creation and redemption, so prices stay near NAV.
Your risk shows up in smaller, niche or thinly traded ETFs. Wide spreads and occasional premiums are more common there, especially near market open and close.
US market hours also matter. Spreads are often wider at the edges of the session. Our guide to world stock market opening and closing times helps you avoid those windows.
If you invest in India from abroad, Indian ETFs behave like the domestic examples above.
Want dollar-based India exposure without exchange premiums? Many NRIs look at GIFT City funds. Two examples are the Tata India Dynamic Equity Fund or the Sundaram India Mid Cap Fund.
If you prefer fixed returns in dollars, look at our USD fixed deposits. Compare them using our guide on GIFT City FD vs FCNR vs NRO and NRE FDs. Then check current rates on our NRI FD rates tool.
The Same Idea Shows Up Everywhere
Once you understand NAV versus price, you start noticing the pattern across markets.
GIFT Nifty and Nifty
GIFT Nifty futures trade in GIFT City, close to Nifty, but rarely at exactly the same level. The gap reflects time, interest costs and sentiment.
You can watch this live on our GIFT Nifty tool. Our guides to GIFT Nifty futures and the GIFT Nifty chart explained show how to read the gap.
For patterns over time, see our GIFT Nifty historical data. Our weekly GIFT Nifty outlook connects overnight global moves to the Indian week ahead.
Derivatives carry their own risks. If you trade them, learn the product first, then explore our futures and options offering.
IPOs and listing prices
An IPO is priced once, but the listing price is set by demand on day one. The gap between the two can be large in either direction.
Our guide to GIFT City IPOs explains how this works inside the IFSC. You can also explore our IPO offering.
Gold ETFs
Gold ETFs follow the same NAV logic, tied to the price of physical gold. Our comparison of gold ETFs vs sovereign gold bonds shows how tradable wrappers differ from held-to-maturity ones.
Mistakes We See With ETF Pricing
These come up again and again in our conversations. Most are habits, not knowledge gaps.
That last point is worth a moment. A low expense ratio means nothing if you paid a large premium to enter.
There is also a behavioural pattern behind most of these mistakes. A rising ETF looks like a winning investment, so people buy more of it.
But part of that rise may be the premium growing, not the holdings. In those cases, momentum is telling you about demand, not about value.
Does This Change How You Think About ETFs?
It should, a little. ETFs are still excellent tools for low-cost, diversified investing.
Domestic index ETFs, with working creation and redemption, usually trade close to NAV. Our guide to the best index mutual funds covers index investing more broadly. Our explainer on what stock market indices are covers what these funds track.
The lesson is narrower. An ETF is only as efficient as its plumbing. When regulation blocks creation, the plumbing breaks, and price can drift far from value.
Want to invest regularly in global markets? Our global investing SIP strategy guide shows how to build the habit with NAV-priced products.
Before You Invest Anything Abroad
A quick word on priorities. ETF pricing is a detail. Your foundations matter more.
Clear expensive debt first. Keep your CIBIL score healthy. Choose cards with low forex markups from our guide to the best credit cards in India.
If you're an NRI, map your NRI home loan and other rupee commitments before adding dollar assets. Keep a strong Indian core too. Our view on the best stocks in India is a reasonable place to start.
For managed exposure, you can explore our mutual fund offering. Investors with larger tickets can compare strategies on our GIFT City AIF tool.
Selling an ETF at a profit or loss has tax consequences, and international holdings add reporting. Our tax filing service can help with both. You can review our regulatory registrations on our licences page.
FAQs on ETF NAV, iNAV and Market Price
Is it bad to buy an ETF at a premium?
A small premium is normal and usually harmless. It reflects trading costs and short-term demand.
A large premium is different. You pay more than the holdings are worth, and that extra amount can disappear without warning. NSE's September 2026 release warns of exactly this risk for international ETFs.
Where can I find the iNAV of an ETF?
Most AMCs publish iNAV on their websites during market hours. Some trading platforms also show it beside the live price.
NSE has advised investors to verify NAVs on the exchange, the AMFI website or their trading application before ordering. Build that check into every ETF trade.
Why don't mutual funds have this problem?
Regular mutual funds issue and redeem units directly at NAV. You never buy from another investor, so there is no market price to drift away.
ETFs trade on an exchange, between investors. That is why their price can differ from NAV.
Will international ETF premiums disappear?
Nobody can predict the timing. The NSE release names two possible triggers: higher overseas investment limits, and price bands anchoring to the previous day's NAV from 1 April 2027.
Either could narrow premiums sharply. If you hold units bought at a high premium, plan for that possibility.
Do NRIs need to worry about ETF premiums?
Less, if they buy large, liquid ETFs abroad with working creation and redemption. Prices there usually stay close to NAV.
NRIs should still check spreads on smaller ETFs, and avoid trading at the open and close. The habit of comparing price with NAV helps everywhere.
Sources
National Stock Exchange of India, Press release on trading in international ETFs, 25 September 2026: https://nsearchives.nseindia.com//web/pressrelease/2026-09/PR_cc_25092026_20260925122830.pdf
DSP Mutual Fund, DSP Nifty 50 ETF scheme information: https://www.dspim.com/media/pages/mandatory-disclosures/simplified-sid-information-available-through-weblink/bf09ea359b-1764359464/dsp-nifty-50-etf.pdf
HSBC Mutual Fund, ETF liquidity and listing details: https://www.assetmanagement.hsbc.co.in/assets/documents/mutual-funds/en/5ef34e5b-29be-441b-b591-556a14ebb830/liquidity-listing-details.pdf
Disclaimer
This article is for educational purposes only and is not investment, tax or legal advice. ETF prices, premiums, overseas investment limits and exchange rules change over time.
Always check the latest NAV, iNAV and scheme documents before transacting. Investments in ETFs and mutual funds are subject to market and currency risk. Please consult a qualified adviser for decisions specific to your situation.