Jal Jeevan Mission: Stocks in the spotlight after tightening of funding norms

Shares of infrastructure companies are in focus as the Centre tightens scrutiny of the Jal Jeevan Mission (JJM). Prime Minister Narendra Modi has made it clear that no state will receive additional funds until all complaints are resolved and functional household water supply is ensured.

States have been asked to act quickly as cases of fraud and inflated reporting come under review.

NCC and Kalpataru Projects (KPIL) are among the most exposed, with JJM order backlogs of ₹7,000 crore and ₹6,500 crore, making up about 11% of their September 2025 order books. Their outstanding receivables stand at ₹1,700 crore and ₹1,550 crore respectively.

PNC Infratech and KEC also have major exposure, with JJM backlogs of ₹2,800 crore and ₹1,600 crore and receivables of ₹800 crore and ₹870 crore.

L&T's water segment has an order backlog of about ₹40,000 crore, most of it linked to JJM. The company said that working capital in its projects and manufacturing business would have been lower if JJM payments had been released on time.

The Centre is reviewing reports from 32 states to decide future fund flows. With ₹2.08 lakh crore already released, the scheme will shift from lump-sum funding to a scheme-based model to enforce stricter accountability.

Irregularities involving officials, contractors and inspectors have led to penalties, blacklisting and FIRs, though actual recoveries remain limited.

Payments to EPC companies have been delayed, particularly from the Centre, and while some states have shown marginal improvement, companies say the broader payment situation is still strained.