Expense Ratio is a measure of total cost you pay to a mutual fund for managing your funds. It includes all expenses like marketing and distribution expenses, fund manager’s fees, legal and administrative costs. It is calculated as a percentage of daily investment value.
For example, if a fund's expense ratio is 1% and your investment in the fund is ₹2,00,000 on a particular day, the total expense you pay on your investment value is:
(1% of ₹2,00,000)/365 = ₹5.4
It means your expense is ₹5.4 on that particular day.
It is calculated as Total Expenses divided by Average AUM of the fund.
Larger the size of a fund, lower is the expense ratio due to scale and vice versa. SEBI has specified limits on maximum expense ratios for various categories of funds and AUM size.
On Rupeezy, every fund you invest in is a direct plan, which carries a lower expense ratio than the same scheme's regular plan since it has no distributor commission built in. See What are direct mutual funds? for the full direct-vs-regular breakdown.