The film depicts the life and downfall of a fictional Bollywood character, played by Kareena Kapoor.
Bhandarkar told DNA India: "Heroine is not based on the life Manisha Koirala. It is absolutely wrong.
"A lot of things had been written about the film before. But all I would say is that I have created a character called Mahi who is today's girl.
"The film is all about how she witnesses the ups and downs in her life. It will be a different sort of a film for Kareena. It is different kind of cinema... she has never done this kind of a film before."
The director has previously denied that the film is inspired by the life of the Nepalese actress.
In November, Bhandarkar suffered a setback after composers Salim-Sulamain asked for a share of royalties from the film.