According to reports, the arrested IM operative has been identified as Asadullah Akhtar alias Haddi, who is believed to be a close aide of Bhatkal.
He is reported to be a prominent bomb planter of the terror outfit.
Akhtar is believed to be involved in Zaveri Bazaar blast in Mumbai.
He was nabbed following the arrest of Bhatkal from Bharatpur near Raxaul which lies on the India-Nepal border in Bihar on Wednesday night, reports said.
Earlier in the day, Union Home Minister Sushil Kumar Shinde confirmed the arrest of Bhatkal. He also confirmed the developments later.
"He (Yasin Bhatkal) has been arrested from Bihar along India-Nepal border last night," said Shinde, confirming the news of arrest of one of India's most wanted terrorists who has been on the run for five years and was actively involved in even planting the bombs himself as caught in CCTV camera footage.
Reports said he would be brought to New Delhi later.
He, however, refused to give the details of intelligence agencies behind the arrest. Reports said some of his movements were tipped off by the US federal investigating agency FBI.
"This is a major catch and it would degrade IM," said former Indian Home Secretary RK Singh.
Opposition Bharatiya Janata Party (BJP) leader Jaswant Singh said now the administration should build on the arrest.
The 30-year-old Bhatkal's arrest along with that of his aide, are seen as major successes of the Indian agencies.
Hailing from Karnataka, Bhatkal's real name is Mohammed Ahmed Siddibappa and there was a Rs 10 lakh reward on him announced by the National Investigation Agency (NIA), which investigates the terror attacks.
NIA will investigate him.
After the arrest of Bhatkal, his father Zarar Siddibapa and uncle Yaqub Siddibapa in a statement to media said "he should be punished if he is guilty of any offence after the due process of law is followed." They said the family is relieved after his arrest.
They said the family has full faith in judiciary and there should not be any media trial.
The statement said Yasin was born in the village of Bhatkal in 1983 and after failing in tenth grade in 2005 he had left for Dubai. His father said he disappeared from Dubai in 2007.
"The truth will come out and our fears that he would be eliminated in a fake encounter have been put to rest," they said, adding that the arrest put to rest their fear that he would be killed in a fake encounter.
Indian Mujahideen (IM) has carried out several attacks against civilian targets in India. It is a front for the Pakistan based Lashkar-e-Taiba. Bhatkal co-founded IM in 2008 with his brother Riyaz Bhatkal and Abdul Subhan Qureshi.
IM is responsible for major strikes like the Pune's German bakery blast where CCTV footage also captured him planing the bomb. He was also reportedly seen at the scene of the Hyderabad blast in Feb this year. He had executed attacks in Bangalore and Ahmedabad too killing over 50 people in the blasts in the Gujarat city in 2008.
In May 2008 after bombings in Jaipur that killed over 60, IM had sent an e-mail to Indian media in which they claimed responsibility for the attacks.
Investigators believe that Indian Mujahideen is one of many groups composed of lower-tier SIMI members. SIMI or Students Islamic Movement of India is a banned Islamic student organisation that was formed in Aligarh, Uttar Pradesh, in 1977.
The Indian Mujahideen was branded a terrorist organisation by India in June 2010. Countries like USA and others also declared IM a terror outfit.
India's External Affairs Minister Salman Khurshid on Thursday said terrorists like Yasin Bhatkal, are losing their safe havens across the world now owing to a strong advocacy by India for a long time.
"They used to get safe havens in other parts of the world, but not anymore. We had continued advocacy on this matter and people [countries] have changed their minds. They are not getting place to hide any more," said Khurshid referring to arrest of Bhatkal.
"India is satisfied that they have to answer for their actions now be it in India or outside," he said.
Khurshid said from wherever terrorists like Bhatkal may be flushed out, India would welcome it.
"But if this is happening it is because of our efforts," he said, adding that the government does not need any cheap publicity for that.
--IBNS (Posted on 29-08-2013)