Jan. 3 (Bloomberg) -- India's rupee rose to the highest in almost three weeks on expectations economic growth and share sales by local companies would attract investment from abroad.

Billionaire Anil Ambani's Reliance Power Ltd. plans to raise as much as 117 billion rupees ($3 billion) this month in the nation's biggest initial public offering. Mumbai-based JSW Energy Ltd. plans to raise as much as $1 billion by March.

``The outlook for Indian equity markets and economy remains robust in spite of uncertainties in the global situation,'' said Ajay Mahajan, head of financial markets at YES Bank Ltd. in Mumbai. ``The rupee should gain as short- and long-term capital inflows remain strong.''

The rupee rose 0.1 percent to 39.395 per dollar as of the 5 p.m. close in Mumbai, according to data compiled by Bloomberg, the first rise in three days. That is the highest since Dec. 14. The rupee's 12.3 percent gain in 2007 was its biggest since at least 1974.

The currency may climb as high as 38.75 by the end of March, Mahajan said. The median estimate in a Bloomberg news survey of 24 economists and strategists is for the rupee to rise to 39 by then.

Reliance Power, a generating unit of India's second-largest electricity producer by market value, will sell 260 million shares at 405 rupees to 450 rupees apiece, three people familiar with the offer said, requesting anonymity before an official announcement. JSW Energy will seek regulatory approval for the share sale this month, two people familiar with the offer said.

Global Funds

Overseas investors bought $1.4 billion of Indian equities in the six days through Jan. 1, the most in a similar period since Oct. 16, data from the Securities and Exchange Board of India show. Such funds purchased a record $17.2 billion in local shares in 2007.

India's economy has expanded at an average annual pace of 8.6 percent since 2003, the fastest among the world's major economies after China.

The currency fell earlier on speculation the nation's oil refiners will buy more dollars to pay for crude oil after prices rose to a record $100 a barrel. There was also concern that weakness in Asian stocks would prompt global funds to reduce investments in the region.

``Oil at $100 has damped rupee-market sentiment,'' said Puneet Sharma, chief currency trader at state-owned Allahabad Bank in Mumbai. ``Asian equities are weak today, raising concerns about slower capital flows to the region.''

Crude oil prices gained 57 percent in 2007, the sixth straight yearly advance and the biggest since 2002, according to data compiled by Bloomberg. The MSCI Asia Pacific excluding Japan Index of regional stocks lost 1.2 percent, poised for the biggest decline since Dec. 17.

India's oil imports averaged $5.1 billion a month in 2007, compared with $4.7 billion in 2006, according to Bloomberg calculations using government data. Monthly growth in the nation's total imports averaged 25 percent last year, compared with an 18 percent gain in exports. The trade deficit averaged $5.9 billion a month, up from $4.5 billion in 2006.

To contact the reporter on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.

Last Updated: January 3, 2008 07:37 EST