I made it work using setuptools specifying dependency link, though why PyPI package is not working is still not clear to me.
from setuptools import setup, find_packages
setup(
...
...
packages=find_packages(),
include_package_data=True,
install_requires=['django-registration==1.0'],
dependency_links = [
"http://pypi.python.org/pypi/django-registration"
],
)