Police said that some of the children were as young as six-year-old. The incident took place at the Bhavani Nagar area. Altogether 10 people were arrested so far.
Sources said Yasin Pehelwan, a muscleman who reportedly brought the children after paying money to their parents from Uttar Pradesh and Bihar, was also arrested.
The children were brought after paying around Rs. 20,000 to their parents and virtually held captive in a building. They were used for bangle-making and leather and other hazardous works.
500-strong policemen were involved in the raids which were carried out at multiple locations in Hyderabad.