State Bank of India , the country's largest lender, has started discussions with market participants to raise around 100 billion rupees ($1.20 billion) through infrastructure bonds, two merchant bankers said on Tuesday.

"SBI has alerted bankers about its plans to come up with a 10-year or 15-year infrastructure bond issue and will finalise the tenor based on investor feedback," one of the bankers said, requesting anonymity as he is not authorised to speak to the media.

This will be the lender's first bond issuance and the country's first infrastructure bond sale this financial year.

SBI is likely to invite bids for the bond issue in early July, the bankers said.

SBI did not respond to a Reuters email for comment.

In January, SBI raised 50 billion rupees through perpetual bonds at an 8.34% coupon. Last financial year, it raised an aggregate of 200 billion rupees through the sale of 15-year infrastructure bonds.

Earlier this month, SBI raised $100 million through its London branch by selling three-year senior unsecured floating-rate bonds that were sold at a spread of 95 basis points above the secured overnight financing rate (SOFR). ($1 = 83.4700 Indian rupees) (Reporting by Bhakti Tambe; Editing by Savio D'Souza)