Atwal, who last won in Dubai in 2014, carded five-under 67 to be two hosts behind Bhullar and Gunn.
Shiv Kapur, coming off a bout of jaundice, showed he was on good way to recovery with a four-under 68 that temporarily placed him Tied-sixth and Jeev Milkha Singh (69) was T-14.
Khalin Joshi, Himmat Rai and Jyoti Randhawa carded 70 each to be T-26, while Chiragh Kumar finished with 72. However among those Indians, yet to finish the round was Anirban Lahiri, a former winner here, as he was way behind at three-over through 17.
He added another birdie on hole 16 and returned with birdies on seven and nine to stay atop the leaderboard.
"It was a bogey free round and at the end of the day, that's the target. I'm trying to repeat what I did last week. In the beginning I was a bit nervous. Coming straight after a victory, your mental aspect is slightly different. You try to go for a par and try not to attack the pins," said Bhullar a six-time Asian Tour winner.
Atwal, a former Asian Tour number one and first Indian to win on the PGA Tour, was a further shot back on 67 at the USD 750,000 event staged at the Royale Jakarta Golf Club.
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