The severe monsoon flooding in 2021 exposed the intricate hydrogeological processes affecting groundwater resources near Ayankulam village in the semi-arid terrain of South Tamil Nadu, India. Despite extensive inundation from overflow of the Nambiar canal, the village well remained dry due to diversion of recharge away from shallow aquifers into deeper concealed karst formations present in the underlying calcarenite bedrock. Detailed geophysical surveys utilizing Azimuthal Square array resistivity combined with Magnetotellurics successfully identified and mapped subsurface pathways of sinking streams that rapidly transported surface water vertically into deeper fractured basement aquifers instead of laterally recharging the shallower dug well. Geochemical analysis of groundwater samples collected from wells in the area revealed progressive evolution of ionic compositions along groundwater flow paths dominated by water–rock interactions including carbonate mineral dissolution, silicate weathering, cation exchange and evaporation. Findings indicated that excessive recharge from heavy rainfall events caused accelerated subsurface drainage of fresh groundwater away from inland recharge zones near Ayankulam village towards the coast. This rapid drainage driven by the hydrostatic pressure exerted by the intense monsoon recharge on the highly permeable karst conduit networks buried beneath the low permeability overlying clay-rich soils. The diversion of freshly recharged water from the surface into deeper aquifers before it could reach the shallow dug well resulted in the phenomenon of “dry fallout” observed in Ayankulam village. This integrated geophysical and geochemical study provided evidence that sinking streams and the complex linkage between shallow and deeper aquifers control groundwater occurrence and movement in the region. The findings emphasize the need for enhanced monitoring and measurement of hydrogeological parameters coupled with integrated water resources management. This is vital for sustainably harnessing water resources amidst growing demands from the increasing population and intensifying climate change pressures that exacerbate rainfall variability.