Background Low birth weight (LBW) newborns especially those < 2000 gms are more prone to hypothermia due to which other physiological parameters gets deteriorated in 1st week of life. The objective of this observational study was to continue Kangaroo Mother Care practice at home and to ascertain whether KMC was effective in improving the vital parameters of LBW babies when it is given at home in a rural coal mines area, in Jharkhand, India.Methods This study was a community-based prospective observational study, done over three years from November 2019 to November 2022. In this study, we included 156 pairs of both mothers and LBW babies (weight 1500 to < 2000 gm). After discharge from the hospital on day 3, KMC was continued at home on day 4, day 5, and day 6. Data of four physiological parameters namely temperature, oxygen saturation, respiratory rate, and heart rate, were collected before and after KMC and analyzed.Results Among 400 newborns, 156 LBW babies (39.0%) who were given KMC at home, showed similar but statistically significant improvement of vital parameters, especially in temperature and oxygen saturation(p < 0.0001) compared to the same babies 156(39.0%) given KMC in the hospital (p < 0.001).Conclusion Kangaroo Mother Care, which was continued at home, has a significant role in the Improvement of vital parameters especially concerning temperature and oxygen saturation. If the babies in the weight range of 1500 to < 2000 gm are healthy, well-breast fed, and have no other risk factors can be discharged early, and managed at home by delivering supportive care, nursing care along with Kangaroo Mother Care with continuous follow-up.