We have investigated the formation of nanostructures on InP surfaces by utilizing 3keV Ar ions. The nanostructures have been studied as a function of ion fluence and show variation in their size and heights. The surface roughness behavior also get modified. The electronic structure investigation suggests that there is excess Indium on the InP surface, after ion irradiation, due to the preferential sputtering of Phosphorus atoms. The In-rich zones lead to the nucleation of nanostructures.