The incident took place late last night in Raiya Road area, where police intervened quickly and avoided any further flare-up.
The two groups were putting up greeting banners related to Makar Sankranti and Id-e-Milad (both falling on Jan 14) festivals when heated argument broke out between them, police said.
"The situation became tense when they came on street armed with sharp-edged weapons," they said.
However, police dispersed members of both the groups and stepped up security in the area to avoid any untoward incident, a police official said.