Utilising a reverse micelle process, we have grafted polyacrylate (P) on graphene oxide (GO) to realise polyacrylate-graphene oxide (P-GO) nanocomposites, upon whose subsequent reduction, polyacrylatereduced graphene oxide (P-rGO) nanocomposites are achieved. Using techniques such as ultraviolet photoelectron spectroscopy (UPS), X-ray photoelectron spectroscopy and X-ray absorption near edge structure (XANES) spectroscopy, in conjunction with high resolution microscopy, Raman spectroscopy and superconducting quantum interference device analysis, we have studied in-depth the electronic, microstructural, electrical and magnetic properties of these P-GO and P-rGO nanocomposites. While the polyacrylate grafting ensures a high solubility of the P-GO and P-rGO, the P-rGO nanocomposites additionally show a near doubling of the paramagnetic response (9.6 × 10-3 emu/g) as compared to the r-GO (5.6 × 10-3 emu/g) and P-GO (5.5 × 10-3 emu/g), respectively at 2 K. The grafting of diamagnetic polyacrylate enhances the magnetic response for the P-GO and P-rGO owing to the increase in the defect states, sp 3-type bonding and enhanced magnetic coupling between the magnetic moments arising due to the presence of nitrogen functionalities. This behaviour is further corroborated via the measurements of the electronic structure by XANES and UPS measurements. Thus, the possibility of manipulation of the magnetic behaviour along with the abundance of surface functional groups makes both P-GO and P-rGO nanocomposites highly conducive for deriving water-soluble functionalised graphene by linking affinity molecules with polyacrylate backbone for biological and bio-medical applications.