Foreign institutional investors are bullish on small and mid-cap companies in the Indian equity market but scarcity of research on a large number of mid-and small-caps is proving to be a hurdle in taking investment decisions, Punita Kumar Sinha, CIO and portfolio manager, Blackstone Group, said in Mumbai on Tuesday.

In the ongoing bull run in the equity markets, the top 200 Indian companies have attracted much of the FIIs money, whereas the medium and small companies still remain undervalued.

The Indian market does not have much room for investment as FIIs cap is there in almost all the major top 200 Indian companies and there is not much research available for medium and small cap companies, Sinha said while addressing Federation of Indian Chambers of Commerce and Industry's Annual Capital Market Conference in Mumbai.

Domestic research focus is on large cap stocks consisting of the top 200 companies whereas for mid-cap and small cap companies not much research is available, Sinha said.

While the Indian market looks expensive right now, India is a long-term story, where one needs to remain invested for three to five years.

"We are bullish on the mid-and small-cap space," the New York-based FII RAS Capital Management's Managing Director Rohit Aggarwal said.

"We are stretched on large cap companies and we need to look at mid-cap and even small cap companies," Aggarwal added.