For the past few years, graphene quantum dots have been utilized in versatile applications due to their ultra-small size, non-toxicity, high heat transfer capacity, water solubility, and biocompatibility. In the presented work, the graphene quantum dots (GQD) is utilized to improve the thermophysical properties of conventional heat transfer fluid. In this research, the polyalkyline glycol (PAG) has been used as a conventional heat transfer fluid. The graphene quantum dots have been synthesized using hydrothermal method and further functionalized for the proper dispersion in PAG. The novel nanofluid has been synthesized using functionalized graphene quantum (FGQD) with based fluid as PAG. The FGQD-PAG nanofluid is synthesized with very lower concentrations of 100 ppm, 200 ppm, and 500 ppm. In order to investigate heat transfer capacity, each concentration of nanofluid has been investigated for thermal conductivity and viscosity. The experimental result shows that 500 ppm of FGQD-PAG lubricant improves the thermal conductivity by 2 W/mk. Also, the optimal viscosity for the nanofluid is observed with 100 ppm of FGQD-PAG based nanofluid. Further, it is observed that the use of graphene quantum dots with PAG base fluid is stable and does not require any use of surfactant for the dispersion. From this research, the problem of aggregation, agglomeration and precipitation occurring due to vander waal force has been addressed and is resolved by covalent surface modification. Thus, it is concluded that the graphene quantum dots can be effectively utilized in industrial applications where energy conservation is required.