Jan. 4 (Bloomberg) -- India's rupee climbed to a seven-week high on speculation planned share sales by local companies will attract investment from overseas.

The currency completed a second winning week as Reliance Power Ltd., a unit of an electricity producer, said it plans to raise as much as 117 billion rupees ($3 billion) this month in the nation's biggest initial public offering. The rupee gained 12.3 percent in 2007, its best performance since at least 1974, as overseas investors bought a record $17.2 billion in local shares to benefit from India's economic growth.

``Big share issues are due and big inflows are expected,'' said L.V. Prasad, chief currency trader at IndusInd Bank Ltd. in Mumbai. ``Foreign investors have fresh fund allocations for India in the new year.''

The rupee rose 0.3 percent to 39.3175 against the dollar this week in Mumbai, the highest since Nov. 15, according to data compiled by Bloomberg. It climbed as high as 39.2975 earlier today after closing at 39.4325 on Dec. 28.

The rupee may strengthen to 39 in the coming months, Prasad said, matching the median estimate for March in a Bloomberg news survey of 24 economists and strategists.

Share Sales

Reliance Power is a generating unit of India's second- largest electricity producer by market value. Equity sales by local companies totaled 18.4 billion rupees in December, according to the National Stock Exchange.

Jaiprakash Power Venture Ltd., a unit of India's biggest builder of dams, may raise more than $1 billion in its first share sale. JSW Energy Ltd., a power producer, plans to raise as much as $1 billion by March and will seek regulatory approval for the share sale this month, people familiar with the offer said.

Overseas funds purchased $1.3 billion of local equities more than they sold in the seven days through Jan. 2, data from the Securities and Exchange Board of India show.

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 local currency also advanced as the benchmark stock index extended last year's 47 percent gain. The Bombay Stock Exchange Sensitive Index, or Sensex, climbed 2.4 percent this week to a record.

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

Last Updated: January 4, 2008 07:19 EST