PSL Ltd, a steel pipe manufacturing company, Wednesday announced its intention of raising up to Rs.3 billion ($68 million) in the next 18 months to fund an expansion drive.

The company's board approved the expansion plan, including a new mill of 350,000 metric tonnes a year costing Rs.1 billion ($22.7 million) and two smaller mills of 75,000 metric tonnes each.

Of the Rs.3 billion the company proposes to raise, about Rs.1.75 billion may be met from issuing foreign currency convertible bonds, a company release said.

The funds will primarily be used for the company's expansion plans in the domestic market and for setting up new facilities in the Gulf region.

PSL will also look to strengthen its presence in regions like east and south India, which are set to become the nerve centres for the Indian gas sector with development projects set to commence in the Krishna-Godavari basin.

"The new projected plants would add to PSL's capacity to meet international demand especially in the Middle East and the subcontinent which is set to play a critical role with the Iran-India pipeline seemingly close to take off," said PSL managing director Ashok Punj.

The company currently has a pan-Indian presence of 10 strategically located pipe mills at Kandla, Chennai, Daman and Vishakapatnam, and the new mills will take its capacity to 1.2 million metric tonnes a year.

The effort to increase production capability is in response to rising regional infrastructure development activities as well as rising demand for water, oil and gas pipelines in the region, the company said.