An arrest warrant for illegal granite mining by his firm pushed Mr Dayanidhi into hiding. His grandfather, M Karunanidhi is the head of the DMK, the political party that is the second-largest member of Dr Manmohan Singh's coalition government. His father, MK Alagiri, is a union minister.
Today, Mr Dayanidhi surrendered in a court near Madurai. He was surrounded by around 100 supporters.
The 26-year-old's appearance was motivated by the fact that he was granted anticipatory bail by the Madras High Court earlier this week, which also dismissed the arrest warrant issued for him.
He has been ordered today to appear daily in court from tomorrow.
"It's a fabricated case. We are ready to face it legally...Durai gave up his position as director of the granite company in 2010," Mr Alagiri said.
The charges against him include criminal conspiracy, trespassing and cheating for illegal quarrying on government land.
A report by a government official finds that the state lost nearly Rs. 16,000 crore because of illegal granite mining by a group of companies in and around Madurai.
In the case of Mr Dayanidhi's company, the report finds violations that add up to nearly Rs. 440 crore.