"The chairman (Subrata Roy) is going to London on June 5 to finalise the deal," an unnamed official of the multi-business conglomerate told the Mumbai-based DNA daily.
"We think that if we can sponsor such a huge club it will give an opportunity for Indian footballers to play as well," the official added.
However, a company spokesman said Sahara had not made much headway on the proposal received from the club in January.
"There is no progress on the issue," spokesman Abhijit Sarkar said when contacted.
The paper said some issues regarding revenue sharing and whether Sahara would have the reach needed to cater to the world club champions' global fanbase were yet to be discussed.
United is seeking a new sponsor after troubled American insurance giant AIG announced in January it would not renew its four-year $100 million deal which runs until 2010.
The Sahara Group, also sponsors of the Indian cricket team, are hopeful the deal would go through as Manchester United can expand its fanbase in the region.
"Apart from the Asian market, they can expand their fan base in India which is a huge market for them," the official told DNA.
The Sahara is an unlisted group with interests from financial services to real estate.
Manchester United had also sent a shirt sponsorship proposal in March to Indian conglomerate Tata group.
"There are various sponsorship options, one for the team shirt. This has been going on for some time but nothing has been finalised," a brand consultant of the group told Reuters in March.
The Tata Group has interests spanning steel, cars, information technology, communication, power, tea and hotels. Tata Consultancy Services, the software arm of the group, is one of the sponsors of the Ferrari Formula One team.
