Owing to the much larger surface (or interface) area per unit volume, drastic difference in material behaviour can be observed between the conventional and nanostructured materials. A nanostructured material can have totally different properties from a larger-dimension material of the same composition because many of the important chemical and physical interactions are governed by the surfaces. This study considers polymer nanocomposites in the form of sheet moulding compounds. The polymer nanocomposite is formed by adding surface modified Montmorillonite nano-clay as a major nano-material to the SMC composite material so as to enhance the material properties. This study considers fabrication and characterization of polymer nanocomposite by employing the compression moulding technique. Scanning electron microscopy has revealed that though the polymer nanocomposites improve the material properties but its fabrication should be carefully carried out in order to avoid formation of irregularities in the material. The x-ray diffraction results confirmed the retention of crystallinity of the polymer nanocomposites. Upon characterization it has been observed that the material properties like tensile strength, percentage elongation and flexural strength are enhanced. The hardness of the polymer nanocomposite material is slightly improved and the specific gravity is also found to be slightly decreasing making the nano-clay composite lighter.