The accused was identified as Mupparapu Chandra Shekar, an unemployed science graduate.
To make quick money, he decided to kidnap school children, said the police.
"He obtained phone numbers of parents of children studying at St Mary's school in Secunderabad. On February 13, he met two nine-year-old boys, both students of class 5th, and asked them to join his tuition," said deputy commissioner of police (north zone) B Sumathi.
The children agreed; the accused met them again last evening and took them to an Internet cafe, the DCP said.
He asked them to leave the money at a Metro pillar near Peenugula Mallanna temple, the DCP said.
Two teams of plain-clothes police officials were posted today near the spot where he had asked to keep the ransom amount, and he was caught, Sumathi said. The two boys were rescued.