"When Arvind takes on (BJP's prime ministerial candidate) Modi, it will be a highly polarised battle between the parties which is likely to benefit AAP as he would be seen as the only leader who is taking Modi head on.
"Although BJP will end up getting its seats, the losers will be Samajwadi Party, BSP and Congress as all the minorities will see AAP as championing their cause," said an AAP source.
"The real impact will be on these parties as AAP has been banking on minority votes, especially when the Muzzafarnagar riots is still fresh in the minds of the people here," the source added.
BJP was aware that to get the maximum seats in UP, it was essential for Modi to contest from the state as that would send out a strong message among the voters here.
That AAP, too, is eyeing a big chunk of votes in UP is evident in Kejriwal's decision to take on Modi. The party feels that such a political move would not only resonate within the state, but across the country, especially in states like Delhi, Haryana and Punjab where AAP has considerable influence among the minorities.
In UP, almost all seats have a Muslim population of over 15-20 per cent while in some constituencies in Delhi, the minority section makes up about 20-22 per cent of the population.
"We are making a gamble in UP. If it works and our political equation clicks, then we can even cross 30 (seats), if it doesn't, we might just get five seats.
"Muslims are upset with SP, BSP and Congress and see us as an option not only in UP, but also at the Centre," the source added.
The party has also been focusing on seats held by SP, BSP and Congress and hoping that the anti-incumbency factor works in respect of the central and state governments.