This paper presents the design, development, and testing of hardware-software systems by the IISc-TCS team for Challenge 1 of the Mohamed Bin Zayed International Robotics Challenge 2020. The goal of Challenge 1 was to grab a ball suspended from a maneuvering UAV and pop balloons anchored to the ground, using suitable manipulators. The important tasks carried out to address this challenge include the design and development of a hardware system with efficient grabbing and popping mechanisms, considering the restrictions in volume and payload, design of accurate target interception algorithms using visual information suitable for outdoor environments, and development of a software architecture for dynamic, multi-agent, aerial systems performing complex tasks. In this paper, we discuss the design of a custom end-effector mounted on a single degree of freedom manipulator, and robust algorithms for the interception of targets in an uncertain environment. Vision-based guidance and tracking strategies are developed based on the concept of pursuit engagement and artificial potential function. The software architecture presented in this work develops an Operation Management System (OMS) architecture that allocates static and dynamic tasks collaboratively among multiple UAVs to perform any given task. An important aspect of this work is that all the systems developed were designed to operate in completely autonomous mode. A detailed description of the architecture along with simulations of complete challenge in the Gazebo environment and field experiment results are also included in this work. The developed hardware-software system is useful for counter-UAV systems and can be used for other applications.