Seroma and high drain output is common complication after modified radical mastectomy (MRM). MRM leaves behind a negative space which fills up with fluid from cut lymphatics and tissue leading to seroma. Tranexamic acid decreases clot degradation thereby plugging the vessels leading to decreased seroma. This study is to determine if tranexamic acid reduces the incidence of seroma formation, drain output, and wound-related complications in post-operative cases of MRM. We conducted a prospective, double blinded, parallel arm, randomized control trial of 160 women with breast cancer undergoing MRM to study the effect of tranexamic in reducing seroma and drain output. Patients were recruited from a period of 2021-2022. Tranexamic acid was given 15 mg/kg IV at the time of administration of anaesthesia and 500 mg twice a day for 5 days with the control group receiving a placebo. The cases were followed up for a period of one month. Drain output, clinical seroma formation, and wound-related complications were recorded. There was a significant reduction in the drain output compared to the patients receiving a placebo (590 ml vs 725 ml: p = 0.001). The number of patients developing a clinically detectable seroma was also reduced (16.3% vs 31.3%: p = 0.025). Tranexamic acid also led to reduction in wound infection (6.3% vs 23.8%: p = 0.002). Wound dehiscence and flap necrosis was also lower in the tranexamic acid group, but it was not statistically significant. Our results show that tranexamic acid reduces seroma formation, facilitates early drain removal, and reduces the wound infection in patients undergoing MRM.