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Officers from the County Lines Disruption Team witnessed an exchange between occupants of a car and a pedestrian in Clarendon Square at approximately 1pm on 24 January.
The car was subsequently stopped and the driver and two passengers detained and searched. Class A drugs, cash and numerous mobile phones were found and seized.
Two men from Coventry, aged 18 and 21, were arrested on suspicion of being concerned in the supply of controlled drugs. A third man aged 21 also from Coventry was arrested on suspicion of possession with intent to supply class A drugs.
All three were later released on conditional bail while investigations continue.
Anyone with information is asked to call Warwickshire Police on 101 quoting incident reference 173 of 24 January.