Keshubhai Patel, a Bharatiya Janata Party veteran, was a two-term chief minister of Gujarat and a six-time member of the Legislative Assembly.
BJP sources said that Modi has set the state unit an ambitious target: to win all the 26 seats.
The results could see the de facto anointment of Modi as the BJPs PM candidate.
Reacting to the win of the Bharatiya Janata Party in Gujarat, the Congress has said that though Narendra Modi has won, it is not "open skies" for him.
A pre-poll survey shows Gujarat Chief Minister Narendra Modi's charisma is set to fetch a bigger victory margin for ruling BJP in assembly elections in the state with seven more seats while Congress may win just 51 seats this time.
Rebel BJP leader Keshubhai Patel, who announced the formation of a new party to take on Gujarat Chief Minister Narendra Modi in the upcoming assembly polls, is likely to be projected as the chief ministerial candidate of the anti-Modi outfit and is hoping that a large number of dissident BJP workers will crossover.
Continuing his tirade against Gujarat chief minister Narendra Modi, dissident BJP leader Keshubhai Patel today called him a "demon" who is responsible for the misery of common people of the state.