Advanced Financial Management · Mutual Funds

Entry and Exit Load, Sale and Repurchase Price (CA Final AFM)

Updated 5 October 2026 · Fact-checked

A load is a charge on buying or selling mutual fund units. Sale (issue) price = NAV + entry load, or NAV ÷ (1 − load %) if load is on the price. Repurchase price = NAV − exit load, or NAV × (1 − exit load %). Identify the NAV, the base of the load, then apply the formula.

Understand Entry and Exit Load, Sale and Repurchase Price

A mutual fund sells and buys back units at prices linked to its Net Asset Value (NAV), the value of one unit. The fund may add or deduct a charge called a load. Loads cover distribution and selling costs and discourage quick exits.

Entry load (front-end load) is charged when you buy units. It makes the price you pay higher than NAV. This higher price is the sale price or issue price.

Exit load (back-end load) is charged when you redeem units. It makes the price you receive lower than NAV. This lower price is the repurchase price or redemption price.

In India, SEBI has prohibited entry load for mutual fund schemes since August 2009, so entry load is mostly a theory and exam concept now. Exit loads still exist and often reduce with the holding period. Exam questions may still give an entry load, so follow the question's data.

The usual exam trap is the base of the load. Most questions state the load as a percentage of NAV. Some state it as a percentage of the sale price or repurchase price. Read the wording before you calculate.

Key rules to remember

Sale (issue) price, load on NAV: Sale price = NAV × (1 + entry load %); Use when the question says load is a percentage of NAV, which is the default reading.
Repurchase (redemption) price, load on NAV: Repurchase price = NAV × (1 − exit load %); Exit load is deducted from NAV. Repurchase price is below NAV.
Sale price, load on sale price: Sale price = NAV ÷ (1 − entry load %); Use only when the load is stated as a percentage of the sale price itself.
Repurchase price, load on repurchase price: Repurchase price = NAV ÷ (1 + exit load %); Use only if the exit load is stated as a percentage of the repurchase price. This is rare.
NAV per unit: NAV = (Market value of assets − Liabilities) ÷ Units outstanding; Compute this first if NAV is not given.
Amount invested and units: Units = Amount invested ÷ Sale price; Redemption proceeds = Units × Repurchase price; Use for investor-level questions.

How to solve Entry and Exit Load, Sale and Repurchase Price questions

Use this method for any load question. The key is to fix the NAV and the load base before using a formula.

1Read the question and note whether NAV is given. If not, compute NAV from assets, liabilities and units.
2Note the entry load and exit load rates, and check whether each is on NAV or on the price.
3Compute the sale price (for buying) and the repurchase price (for selling) using the matching formula.
4If the question gives an amount to invest, divide it by the sale price to get units. Do not round units early.
5For redemption, multiply units by the repurchase price to get proceeds.
6If asked for return, compare proceeds plus any dividend with the amount invested, and divide by the amount invested.
7State the answer with units and rupee signs, and add one line on what it means, such as the load cost to the investor.

Quickest way: Load factor shortcut

When to use it: Use when the load is a percentage of NAV and the question needs several prices or a return over a holding period.

Write the factors once: buy factor = 1 + entry %, sell factor = 1 − exit %.
Return on one unit = (NAV₁ × sell factor + dividend) ÷ (NAV₀ × buy factor) − 1.
Multiply once and subtract 1, instead of finding each price separately and then units.
Units cancel out in percentage return, so skip them unless the question asks for units or total rupees.

Common mistakes in Entry and Exit Load, Sale and Repurchase Price

Applying the load to the wrong base, for example using NAV ÷ (1 − load) when the load is on NAV.
Students memorise one formula and ignore the wording.
Fix: Underline the phrase that states the base. If it says nothing, treat the load as a percentage of NAV.
Adding exit load to NAV, or subtracting entry load from it.
Students forget that the investor pays more on entry and receives less on exit.
Fix: Remember the order: entry load adds, exit load subtracts. Sale price ≥ NAV ≥ repurchase price.
Calculating return on NAV instead of on the price actually paid and received.
Loads feel like a side detail and get dropped from the return working.
Fix: Use the sale price as the cost and the repurchase price as the proceeds.
Rounding units too early.
Students round to whole numbers to simplify the working.
Fix: Keep units to three or four decimals unless the question says otherwise.
Forgetting dividends or the new NAV when a holding period is given.
Students see the load data and stop reading.
Fix: List every cash inflow: dividend received plus redemption proceeds at the exit NAV.
Using the same load rate for both buying and selling.
Students mix up entry and exit load rates.
Fix: Write the two rates separately at the top of the working.

Worked examples

Example 1

A mutual fund scheme has a NAV of ₹50 per unit. The entry load is 2% and the exit load is 1%, both on NAV. Rohan invests ₹1,02,000 in the scheme. After a year, NAV is ₹58 and he redeems all units. Find the units bought, the redemption proceeds and his percentage return.

Show the solution

Sale price = 50 × 1.02 = ₹51.
Units = 1,02,000 ÷ 51 = 2,000 units.
Repurchase price at ₹58 NAV = 58 × 0.99 = ₹57.42.
Proceeds = 2,000 × 57.42 = ₹1,14,840.
Gain = 1,14,840 − 1,02,000 = ₹12,840.
Return = 12,840 ÷ 1,02,000 = 12.59% (approx.).

Answer: Units = 2,000; proceeds = ₹1,14,840; return ≈ 12.59%.

Example 2

A fund has assets of ₹12,50,00,000 and liabilities of ₹50,00,000. It has 10,00,000 units outstanding. The entry load is 3% of the sale price and the exit load is 2% of NAV. Find the NAV, the sale price and the repurchase price.

Show the solution

Net assets = 12,50,00,000 − 50,00,000 = ₹12,00,00,000.
NAV = 12,00,00,000 ÷ 10,00,000 = ₹120.
Entry load is on the sale price, so sale price = 120 ÷ (1 − 0.03) = 120 ÷ 0.97 = ₹123.71 (approx.).
Exit load is on NAV, so repurchase price = 120 × (1 − 0.02) = ₹117.60.

Answer: NAV = ₹120; sale price ≈ ₹123.71; repurchase price = ₹117.60.

Exam tips

Read the base of the load first. A load on the sale price needs a division, not a multiplication.
Write the buy factor and sell factor at the top, so you do not mix entry and exit loads under pressure.
In multi-part questions, compute NAV first. Later parts such as units and returns depend on it.
Add a one-line conclusion, such as the cost of load to the investor. It earns interpretation marks.
Mention in a theory answer that SEBI has prohibited entry load since 2009, but still solve the numbers as the question states.

Practice questions from Mutual Funds

Entry and Exit Load, Sale and Repurchase Price in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Entry and Exit Load, Sale and Repurchase Price: frequently asked questions

What is the difference between entry load and exit load?

Entry load is charged when you buy units and raises the price you pay above NAV. Exit load is charged when you redeem and lowers the price you receive below NAV. Entry load adds to NAV, exit load subtracts from it.

What is the formula for sale price and repurchase price?

When the load is on NAV, sale price = NAV × (1 + entry load) and repurchase price = NAV × (1 − exit load). If the entry load is a percentage of the sale price, use NAV ÷ (1 − load).

Is entry load still charged on mutual funds in India?

No. SEBI has prohibited entry load on mutual fund schemes since August 2009. Exit loads can still apply. Exam problems may still give an entry load, so follow the data in the question.

Do I need NAV to find the sale price?

Yes. If NAV is not given, calculate it as net assets divided by units outstanding. Then apply the load to that NAV.