SEBI introduced mandatory grading of Initial Public Offers (IPO) in 2007 to enhance information symmetry between issuing companies and investors in the primary market, particularly for retail investors, increasing overall investor participation and ensuring pricing efficiency. However, in December 2013, SEBI scrapped mandatory grading and made it an optional exercise; this event signals that mandatory IPO grading failed to meet its objectives. This paper attempts to analyze the impact of mandatory grading of IPO in promoting investor confidence by analyzing all graded IPO offered during the mandatory grading regime (2007-2013) using regression analysis. Results indicate that IPO grades have a significant influence on retail demand; also, high graded issues attract demand from across all investor categories. Further, high graded IPO seem to be priced efficiently as compared to others. Overall, this study suggests that this provision should have been retained, especially in the interest of retail investors.