Water stocks in the Indian market have experienced significant gains, with some companies posting up to 45% increases over the past month. According to reports from Economic Times, this surge has been primarily driven by the growing importance of water infrastructure in AI-powered data centres. While Wednesday's trading session showed mixed results across the sector, the overall momentum remains strong as investors recognize the critical role of water in AI infrastructure operations.
Recent trading data reveals varied performance among key water sector companies. As reported by Economic Times, Felix Industries emerged as the top gainer, rising 2.67% to ₹190.05. Other notable performers included Enviro Infra Engineers which gained 0.69% to ₹229.06, while Indian Hume Pipe Company rose 0.37% to ₹415.95. However, VA Tech Wabag declined 0.64% to ₹2,106.50, and Denta Water and Infra Solutions advanced 0.25% to ₹336.25.
The water sector's momentum is being supported by substantial government infrastructure reforms through Jal Jeevan Mission 2.0, which was restructured in March 2026. As reported by Business Standard, the mission has been enhanced with an ₹8.69 trillion total outlay while extending the deadline to December 2028. The mission's objective has pivoted from infrastructure linkage to a reliable utility-based service delivery model, addressing serious implementation gaps that emerged from the first phase. At launch, only 16.7% of India's 193.5 million rural households had tap connections, but by March 2026, coverage reached 81.6%, adding 125.5 million new connections.
The mission's delivery record exposed significant implementation gaps, with the 2024 Functionality Assessment finding that while 98% of households had tap connections, only three in four households received water that met Mission standards of quantity, quality, and regularity. As reported by Business Standard, JJM 2.0 addresses these issues through defined service delivery standards, Sujalam Bharat geographic information system, and reform-linked memorandums of understanding that make operations and maintenance a mandatory requirement. The mission also introduces source sustainability planning and conditions fund release on GIS validation and MoU compliance.
The water and wastewater sector presents substantial investment opportunities in India. As reported by Economic Times, the estimated market size is approximately ₹25,000-30,000 crore per annum, split roughly 40:60 between water and wastewater segments. SBI Cap Securities' Sunny Agrawal noted in his 2024 report that the sector continues to remain under focus as it addresses basic water availability needs, with current sewage treatment covering only about 40% of requirements, and many cities lacking adequate sewerage networks and water supply systems.
