The controlled release and targeted delivery of drug to tumour sites using magnetic nanoparticles (MNPs) for the treatment of cancer & other ailments is current focus of research. Here we describe our efforts in functionalization of hematite nanoparticles α-Fe2O3 with polyethylene glycol (PEG) and activation with Folic Acid (FA) (ligand) using a high energy ball milling process. An extra peak at 48.3° in XRD hints an encapsulation of polyethylene glycol on α-Fe2O3 nanoparticles (NPs). The decrease in the intensity of absorption spectra peaks in UV - Vis NIR spectrum pertinent to activated α-Fe2O3 NPs indicate indeed there is a conjugation of folic acid on top of PEG. Thermo-gravimetric analysis shows 5% weight loss for the activated α-Fe2O3 NPs due to desorption of chemi-adsorbed PEG from NPs and its further decomposition. Magnetization measurements indicates indeed the coercivity persists even after activating the NPs with FA. We believe presence of coercivity in MNPs can be exploited in magnetic hyperthermia treatment of cancer cell by applying suitable amount of field at the targeted site. © 2018 Author(s).