We report an in-situ synthetic strategy to prepare water dispersible polyurethane (WDPU) from an organic/inorganic hybrid nanocolloids in which the organic component is dinitrobenzene-modified hydroxyl-terminated polybutadiene (HTPB-DNB)-based polyurethane and the inorganic part is TiO2 (core)–SiO2 (shell) nanoparticles. The shape, size, and polydispersity of the hybrid nanocolloids are determined using microscopic and light scattering studies and are found to be slightly dependent on the loading of core–shell nanofillers. FT-IR and solid-state NMR studies prove the presence of the interaction between the carbonyl functionality of the urethane linkage and the SiO2 present in the shell part of the particles, and this interaction is found to be the driving force for the formation of stable nanocolloids. The films, obtained from the nanocolloids of WDPU upon curing, display better thermal and mechanical properties, and also, these properties increase with increasing loading of nanofillers. Higher tensile strength and Young modulus are obtained in WDPU nanocolloids films compared to pristine WDPU films. The antibacterial activity of WDPU nanocolloids was studied on Staphylococcus aureus(Gram-stain-positive bacterium) and Escherichia coli (Gram-stain-negative bacterium) displayed significantly higher zone of inhibition in both the cases, indicating the potential use of these nanocolloids in antibacterial coating.