K Rakesh Reddy was found murdered near Saketh Towers at Kapra here on September 23, police said.
K Sridhar Reddy, his uncle, had tried to extort a ransom of Rs 8 lakh from Rakesh's parents and subsequently killed him, deputy commissioner of police (Malkajgiri Zone) Rama Rajeshwari R said.
Sridhar had borrowed money from various people and also collected huge amounts by promising jobs to some youths who were known to Rakesh, the DCP said.
According to police, on September 23 Rakesh went to Sridhar Reddy and stayed with him, because he was uncomfortable staying at his own home. Sridhar decided to take advantage of this situation, he sent text messages from Rakesh's phone to his father Balreddy, demanding ransom, to make it look like kidnapping by some unknown person.
Later he killed Rakesh by stabbing him multiple times in sleep so as to keep a lid on the crime.