New Delhi, March 26 -- Changes to the benchmark Nifty50 index will be effective from 28 March. Jio Financial Services Ltd and Zomato Ltd will replace Bharat Petroleum Corp. Ltd (BPCL) and Britannia Industries Ltd. The reshuffle will alter the index's price-to-earnings (P/E) multiple and revive the debate over whether Nifty's valuation is expensive or justified-particularly among fund managers who rely on index-based valuations for capital allocation to countries.

based valuation? To answer that, it is essential to understand how Nifty constituents are selected and how index valuation is calculated.

Read this | Nifty reshuffle: Zomato and Jio Financial could edge out Britannia and BPCL in India's benchmark index

The Nifty index includes...