Abstract According to traditional finance theories, investors make rational decisions using all the available information; however, the scenario does not remain the same due to behavioral factors or biases. Studying the impact of behavioral biases on investment decisions can considerably improve the process of decision-making for investors. Hence, this study aims to directly analyze behavioral factors' impact on retail investors' investment decisions; individuals generally neither have in-depth knowledge nor the expertise to make effective decisions. Further, the missing link of risk perception between behavioral biases and investment decision-making needs to be established. This study addresses the gap by taking risk perception as a mediator to examine the impact of selected retail investors' biases, that is, overconfidence, loss aversion, mental accounting, and herd behavior, on their investment decisions. Financial literacy is likely to impact the causal relationship between behavioral biases and financial decisions, which is taken as the moderating variable in this study. The Data were collected from retail investors, and the responses were used to conduct the analysis and establish the relationship. The Structural Equation Modeling Technique was used, as applied by other researchers in similar studies. The findings indicate that selected biases significantly impact investment decisions except for loss aversion bias. Furthermore, mediation and moderation were also found to be significant. Keywords: Behavioral Finance, Investment Decision-making, Financial Literacy, Risk Perception