The biggest challenge of all time has been to comprehend and measure how investors behave during various states of capital market and see whether there is any heterogeneity amongst them when tested with their perception and demographic characteristics. Modern financial theories reaffirm that investors are biased, and they make irrational decisions. The apparent condition of the irrationality of retail individual investors is the result of various factors in the economy. The institutional investors, Foreign Institutional Investors, Qualified Institutional Buyers, and other wealthy investors influence the market to a great extent leaving the individual investors to behave irrationally when they make investment decisions. The study was carried out to help investors understand the impact of individual investor behavior on investment decisions and performance. The study concludes that Indian investors are biased, and their investment decisions are affected by their own biases. The results of this study can also be generalized for other similar economies around the world, as it is imperative and responsibility of regulators as well as policymakers to safeguard the interests of individual investors and contribute to the prosperity of capital markets.