Bus conductor A R Nimbalkar, 35, his wife Usha, 30, mother Kusum, 53, and two-year-son old Kunal were seriously injured in the incident. Sources say, teams of forensic experts and Anti-Terror Squad have reached the spot.
Inspector General Ritesh Kumar, Superintendent of Police Dattatraya Mandalik visited the site and sniffer dogs have been pressed into service, police said.
Maharashtra Home minister R R Patil has issued instructions to remain alert, senior police officers said.
The radio and the batteries have been seized for further investigation, they said.
Nimbalkar, who was on duty in Mumbai-Ambejogai bus on Friday, noticed a radio set abandoned in the bus when all the passengers got down. He took the radio home and while trying to replace its battery pack it exploded, police added.
According to them, the sound of the explosion could be heard as far as three kilometers away from the spot.
The injured have been admitted to Swami Ramanand Teerth (SRT) hospital in the town, police said.
Dr Rakesh Jadhav, who is attending the injured at the hospital, said that eyes of the injured were severely damaged in the incident and they were being operated upon immediately.