MUMBAI - ONGC Videsh, the overseas arm of India's Oil and Natural Gas Corp, plans to raise up to 24 billion rupees ($515 million) via bonds, two sources with direct knowledge of the matter said on Tuesday.

The company is expected to begin accepting bids next week for five-year bonds carrying a coupon rate of up to 8.50 percent, the sources said.

A final decison on the bond issue is expected on Thursday, one source said.

The bonds are rated 'AAA' by Indian rating agency Crisil, even if they were issued without a guarantee from parent ONGC.

Ten arrangers have been appointed, including Standard Chartered Bank, Trust Investment Advisor, AK Capital, ICICI Bank, ICICI Securities Primary Dealership, SBI Capital Markets, Citibank, Axis Bank, HSBC Bank.

OVL had earlier this year raised 50 billion rupees via one-year commercial paper, and last month ONGC's chairman said ONGC is looking to refinance OVL's debt. ($1=46.7 Indian rupees) (Reporting by Jeanette Rodrigues; Editing by John Mair)

India State Bank of India