Introduction: Portentous pandemic of COVID-19 chaos has caused incredulous insult on human race. COVID-19 infection in pregnant women is as same as other reproductive age group. Data is limited on perinatal COVID-19 transmission; in this study we report a case of innate COVID-19 infection in a neonate with post covid sequel. Methodology: Prospective observational study conducted in a tertiary care centre. Results: A 21 year old pregnant women at her 32 weeks of gestation was tested positive for COVID-19 (RTPCR), she had asymptomatic course, delivered a baby with features of Hydrops fetalis. Baby showed elevated levels of anti SARS CoV antibodies. We hypothesise causality of Hydrops fetalis could be innate COVID-19 infection. Discussion: Hydrops fetalis has classically been defined as the presence of extracellular fluid in at least two fetal body compartments. Across the globe, there are two reported cases of Hydrops fetalis. In first case there was fetal demise at 13 weeks of gestation with changes of Hydrops fetalis, viral particle in the placenta and amniotic fluid was demonstrated. In second case a preterm baby was delivered at 35 weeks of gestation with changes of Hydrops fetalis, where mother had recovered from COVID-19 infection during pregnancy.