"We were so shocked," Joshy Malyiekkal, owner of the apartment complex, told the BBC.
Residents were put off drinking the water by the colour and smell and also had to go without a wash.
"The children couldn't go to school and even their parents couldn't go to work," Malyiekkal said.
Work to pump the well clean will take a month and the residents are reliant on water deliveries until the job is completed.
The mishap echoes a Kiwi video that went viral in 2013, which showed a house that was plumbed with beer instead of water.
The stunt, from Tui brewery, saw Auckland builder Sean Brown and his friends put barrels of beer under his brother's house and connect them to the taps.
They then rigged the house with cameras and recorded Russell Brown's reaction when he discovered his brother's prank.
The clip blew up online, attracting over a million views in one day and generating huge publicity for Tui.