The CTF team led by ACP I Chittibabu and inspector Syed Mohammed Eliyas seized 1,140 ampules of injection, valued at around Rs 1.15 lakh.
The arrested men were identified as Kakara Pydiraju (38) of Kallupakalu area, T Balakrishna (18), and the B-Tech graduates P Saikrishna (23) and Y Shiva Kumar (22).
They procured the injections from a medical store in Bhadrak of Odisha and sold them to addict students.
Saikrishna told police he became addicted to the sedative and later became a drug peddler for easy money.
It was mostly the engineering college students who bought them. One ampule costs about Rs 5, but the gang sold it for Rs 200 to Rs 400.
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