In India listing of the close ended schemes’ units on a recognised stock exchange is mandatory. A Mutual Fund may, in addition to listing the unit, also offer repurchase facilities which will enable the investor to sell the units back to the Mutual Fund at the repurchase price determined by the fund.
The repurchase is always linked to the NAV and is normally at a small discount to the NAV, to cover the transaction costs.
Repurchase and reissue prices are particularly relevant for open ended schemes. This is because units of open ended schemes are not listed on the stock exchange. Investors can buy or sell these units only from and to the Mutual Fund at the reissue and repurchase prices.