Ethyl 2‐(2,6‐dioxocyclohexyl)‐2‐oxoacetate was prepared by reacting cyclohexane‐1,3‐dione (1) and diethyl oxalate (2) with the help of sodium ethoxide in ethanol at 0–5°C. Subsequent treatment of ethyl 2‐(2,6‐dioxocyclohexyl)‐2‐oxoacetate with hydrazine hydrate in ethanol resulted into ethyl 4‐oxo‐4,5,6,7‐tetrahydro‐2H‐indazole‐3‐carboxylate while without solvent in excess hydrazine hydrate on reflux resulted into 4‐oxo‐4,5,6,7‐tetrahydro‐2H‐indazole‐3‐carbohydrazide (3). The synthesis of novel indazole bearing oxadiazole derivatives (ODZ 01 to 16) has been achieved by the reaction of hydrazide of 2H‐indazole (3) with acid (4a, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p) in the presence of POCl3, and the antimicrobial activity of synthesized novel compounds has been studied.