T D Rayalu was attacked with sharp-edged weapons by around five persons when he was sitting in a shop near Gandhi High School, according to police. He died on the spot.
Police detained one person named Praveen later, but others are still on run, said West Godavari district superintendent of police Bharat Bhushan.
He said police are investigating various angles like business rivalry or family dispute, if any, in the case.
"At present, we are suspecting five persons involved in this crime. Police suspect that Praveen's brother is the main conspirator and looking for him," he said.