In this study production of isomaltooligosaccharide from potato peels starch was carried out in three steps such as liquefaction, saccharification, and transglycosylation. Further, cloning α-transglucosidase gene from Aspergillus niger (GH31 family), transforming into E. coli BL21 (DE3), overexpressing and purifying the resulting protein for the production of α-transglucosidase. For improved reusability, the generated α-transglucosidase was then bound with magnetic nanoparticles (6 cycles). All the modifications were characterized using the following methods: Fourier transform infra-red (FT-IR) analysis, Field Emission Scanning Electron Microscopy (FESEM), Energy Dispersive X-ray (EDX) spectroscopy, X-Ray Diffraction Spectroscopy (XRD), and Thermogravimetric Analysis (TGA). Further The optimum conditions for transglycosylation were determined by RSM as follows: enzyme to substrate ratio 6.9 U/g, reaction time 9 h, temperature 45°C, and pH 5.5 with yield of 70 g/l (±2.1). MALDI-TOF-MS analysis showed DP of the IMOs in ranges of 2-10. The detailed structural characterization of isomaltooligosaccharide by GC-MS and NMR suggested the α-(1→4) and α-(1→6)-D-Glcp residues as major constituents along with minor α-(1→2) and α-(1→3)-D-Glcp residues.