# India's big companies trapped in old economy, Bernstein warns

> Foreign investors are fleeing Indian equities as large corporations fail to adapt to new technologies, despite the country's rapid economic growth.
- Title: India's big companies trapped in old economy, Bernstein warns
- Summary: Foreign investors are fleeing Indian equities as large corporations fail to adapt to new technologies, despite the country's rapid economic growth. Bernstein…
- Keywords: bernstein, india, foreign investors, nifty 50, large-cap stocks, reliance industries, hdfc bank, tata group, stock market, business, finance, India's
- Source: CNBC — https://cnbc.com/2026/09/22/foreign-investors-bernstein-india-tata-reliance.html
- Author: Priyanka Salve
- Published: 2026-09-22T07:26:49+00:00
- Read time: 1 min
- Topics: bernstein, india, foreign investors, nifty 50, large-cap stocks, reliance industries, hdfc bank, tata group, stock market, business, finance
## Bernstein: large caps are outdated
Global brokerage Bernstein said on Monday that India's large-cap companies represent a bygone economic era and lack the high growth rates needed to justify their sky-high valuations.

> Many of India's large caps represent a bygone economic era
## Big companies avoid investing in future
Bernstein found that large Indian corporates are consolidating their past rather than investing in emerging technologies like electric vehicles and semiconductors, often expecting government policy to shield them from global competition.

> Most [large corporates] are not investing in the future, but consolidating their past
## Foreign investors sell eighteen point three billion dollars
After briefly buying Indian equities in July and August, foreign portfolio investors have sold one point seven billion dollars worth of direct stocks in September alone, bringing the year's total to nearly twenty six billion dollars, the highest ever.
## Nifty 50 down more than ten percent
India's large-cap index, the Nifty fifty, has fallen more than ten percent since January, making it one of the worst-performing markets in the world, despite India remaining the fastest-growing major economy.
## Mid-caps grow faster but lack scale
Mid-cap and small-cap companies reported thirty one percent earnings growth in the June quarter versus eleven percent for Nifty fifty companies, but Bernstein said these smaller firms remain sub-scale with low free floats and limited liquidity unsuitable for large institutional capital.
## No reversal expected even if AI trade weakens
Bernstein warned that foreign investors should not expect capital to return to India once the global artificial intelligence trade settles or Middle East tensions ease, saying it would be folly to assume money is simply waiting to be invested.

> It would be a folly to think that it's just a matter of time, and once the AI trade settles and the Middle East crisis resolves, foreign money is just waiting to be parked into India
## Key takeaway

Bernstein says India's large-cap companies lack growth to justify high valuations, prompting foreign investors to sell eighteen point three billion dollars in equities this year.