"I used to watch a lot of action movies and I felt this country loves action. So there is a room for something that can really be watched as live sporting event," Kundra, who married Bollywood actress Shilpa Shetty in 2009, told here.
Kundra approached Sanjay with the concept.
"MMA has been in US for the past 10 years. I went to Sanjay Dutt and said - 'I want to launch this sport'. He said 'I also watch it every night... let's go and do it'. Since he has partnered with me, everything has been smoother and people are enjoying it," he added.
MMA is a full contact combat sport, and includes boxing, wrestling, Brazilian Jiu-Jitsu, Muay Thai, Kickboxing, Karate, Judo and other fighting styles.
Kundra, who is also a co-owner of Indian Premier League (IPL) team Rajasthan Royals, says SFL is an attempt to make martial arts get recognised as a second sport in the country.
"We are a part of the country where a billion people live. We can't run the country on one league. We need to give them something else.
"Keeping fit, six pack abs, fights is all part of this age, so why not give a platform to make money out of it and not just give everything to cricket," he said.
"We need more sports. We are getting people from the grassroot level for this. This is not a rich man's sport. This is a sport where we are trying to promote Indian wrestlers. We want people to recognise it as a second sport in India," he added.
Kundra, who is soon to become a father, says he and Sanjay may bear losses with this initiative, but they are confident about its success.
"We are going into losses, but we don't really mind it. It's not all about the money, evaluations are secondary. We want to create and nurture Indian talent. We won't be doing staged things, we have everything in real," he added.
Over 30 national and international fighters will fight it out in the ring to be adjudged the undisputed champion.
SFL matches have already taken place in Mumbai and Chandigarh, and the third match will be held in the capital Sunday. The event, at the Indira Gandhi Indoor Stadium, will see performances by Mallika Sherawat, Zarine Khan and Anushka Manchanda.