We report a new zircon U–Pb age of 1257 ± 6 Ma for the Punugodu granite (PG) pluton in the Eastern Dharwar Craton (EDC), Southern India. The Mesoproterozoic PG is alkali feldspar hypersolvus granite emplaced at shallow crustal level, as evident from the presence of rhyodacite xenoliths and hornfelsic texture developed in the metavolcanic country rocks of the Neoarchaean Nellore Schist Belt (NSB). Geochemically, the PG is metaluminous, ferroan and alkali-calcic, and is characterized by high SiO2 and Na2O + K2O, Ga/Al ratios >2.6, high-field-strength elements and rare earth element (REE) contents with low CaO, MgO and Sr, indicating its similarity to anorogenic, alkali (A-type) granite. The highly fractionated REE patterns with negative europium anomalies of PG reflect its evolved nature and feldspar fractionation. Mafic (MME) to hybrid (HME) microgranular enclaves represent distinct batches of mantle-derived magmas that interacted, mingled and undercooled within the partly crystalline PG host magma. Felsic microgranular enclaves (FME) having similar mineralogical and geochemical characteristics to the host PG most likely represent fragments of marginal rock facies of the PG pluton. The PG appears to be formed from an oceanic island basalt (OIB)-like source in an anorogenic, within-plate setting. The emplacement of PG (c. 1257 Ma) in the vicinity of Mesoproterozoic Kanigiri Ophiolite (c. 1334 Ma) shows an age gap of nearly 77 Ma, which probably suggests PG emplacement in an extensional environment along a terrain boundary at the western margin of the Neoarchaean NSB in the EDC.