The face value is the term used to describe the value of a unit in the books of the mutual fund. If a mutual fund issues 1000 units in a IPO at Rs. 10 each, it collects Rs. 10000. If subsequently the value of the Rs. 10000 invested goes up to Rs. 12,000, the value of 1 unit is Rs. 12. New investors will pay Rs. 12 to buy the units, Rs.2 being the premium over the face value of Rs. 10. In order to keep a count of the number of units, it is important to assign a face value to a unit.