The teargas canisters were fired upon students by police personnel during a clash on Friday over the Telangana issue.
Santosh Reddy (13) and Vinod Reddy (17) extracted the explosive powder (ammonium nitrate) from the shells, apparently while playing, and when they lit the powder, it exploded triggering minor fire, police said.
"They negligently handled the fired/used teargas shells. Nitrate and other explosive material in the shells exploded when it came in contact with fire," Inspector P Ashok of the Osmania University Police Station said.