The incident happened in market area of Warsaliganj in the district in the evening, when the victim, identified as Om Shankar Lal (40) closed his shop and was about to go home.
"Three criminals were waiting for him. They shot at Lal and snatched a bag of ornaments carried by him. Lal died on the spot," said Nawada Sadar DSP Sanjay Kumar Pandey.
The police reached the spot and took the body in its custody. It is also verifying the details regarding ornaments in the bag. Raids are being conducted to nab the criminals.
Nawada Superintendent of Police (SP) Parvez Akhtar said the three had come to kill a builder and liquor trader Rajeev Sinha.
The arrested persons are history-sheeters and have been to jail several times on charges of murder, kidnapping and loot.