State Bank of India, the country's largest lender, is likely to carry out a sale of infrastructure bonds worth up to Rs 10,000 crore around end of this month, according to news agency Reuters. The bank has taken internal approvals for the issue and bidding is expected in the last week of July, the report said. The proposed bond issue will have a base size of Rs 5,000 crore, with an equivalent greenshoe option.

SBI last issued infrastructure bonds in January when it raised Rs 9,718 crore through 15-year bonds at 7.70 percent.

What are infrastructure bonds

Infrastructure bonds serve as vital financial instruments utilized by governments, banks and authorized infrastructure companies in India to secure funds for various developmental projects within the country. Typically, they come with a maturity period ranging from 10 to 15 years, with a lock-in period of 5 years during which investors cannot sell the bonds

". After this lock-in period, investors have the flexibility to exit by trading the bonds on the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE). Participation in infrastructure bond investments is open to all Indian citizens above 18 years of age, as well as Hindu Undivided Families (HUF), which encourages broader involvement in the nation's development and growth," said Abhijit Roy, CEO at GoldenPi, an online bond marketplace.

Should one invest

As per Roy, these bonds present an attractive investment option for individuals seeking a fixed income, offering a decent rate of interest.

"The domestic bond market has witnessed remarkable growth, raising around Rs 8.2 lakh crore in the last financial year, and it is expected to set a new record with Rs 9 lakh crore raised in the current financial year. This surge is driven by increasing government spending and a revival in private capital expenditure, with infrastructure bonds playing a pivotal role in bolstering the country's economy," he told CNBC-TV18.com.