More than 20 children held hostage by a man inside a studio in Mumbai's Powai area were safely rescued by police and fire brigade teams on Thursday, an official said.

"All the children are safe," said joint commissioner of police Satyanarayan.

The man, identified as Rohit Arya who appeared to be mentally unstable, was taken into custody, said another official.

The dramatic situation unfolded at RA Studio near the L&T building over an hour on Thursday afternoon. The children, boys and girls around 15 years old, had been called for an 'audition', as per the preliminary information.

Before the children were rescued, Arya released a video on social media, saying he wanted to speak to a few people and ask them questions, and he did not want money. If he was not allowed to do so, he will set fire to the studio, he threatened.

"The man, Rohit Arya has been detained by the Police. The Police are talking to him and trying to find out why he took such a step and if actually is mentally unstable," Mumbai police said.