This paper presents the design, development, and testing of hardware-software systems by the IISc-TCS team for Challenge 1 of the Mohammed Bin Zayed International Robotics Challenge 2020. The goal of Challenge 1 was to grab a ball suspended from a moving and 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 dynamic missions. In this paper, a single degree of freedom manipulator attached with an end-effector is designed for grabbing and popping, and robust algorithms are developed for the interception of targets in an uncertain environment. Vision-based guidance and tracking laws are proposed based on the concept of pursuit engagement and artificial potential function. The software architecture presented in this work proposes an Operation Management System (OMS) architecture that allocates static and dynamic tasks collaboratively among multiple UAVs to perform any given mission. 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 proposed hardware-software system is particularly useful for counter-UAV systems and can also be modified in order to cater to several other applications.