The actress demanded an "astronomical fee" for the role, according to Mid Day.
A source told the tabloid: "As the channel was launched in May, they are looking at grabbing eyeballs. The show would feature hot hunks, so they felt the sexy siren was the best bet to anchor the show.
"Initially, Mallika showed interest but when the monetary talk began she was like a diva who refused to budge."
Ranbir Kapoor, Siddartha Mallya and John Abraham are all slated to appear on the series, the paper claims.
Sherawat has previously hosted the Indian dance reality show Chak Dhoom Dhoom.
However, she was ousted as a judge after allegedly throwing tantrums on set and refusing to talk to the press.
Producers of India's Sexiest Bachelors are said to have brought in television anchor Shibani Dandekar to present the programme.
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