Dilip Botale was found strangled with his body wrapped in a bed and burnt inside a room in a chawl in suburban Santacruz on Friday evening, they said.
The 30-year-old may have been murdered due to personal enmity and a manhunt has been launched to nab the killer, said Deputy Commissioner of Police Dhananjay Kulkarni.
According to Santa Cruz police, the incident came to light when a local resident, Raju Sharma (30), noticed smoke emanating from the room.