Mumbai: Billionaire investor Rakesh Jhunjhunwala, bullish on India as oil prices plunge and Narendra Modi’s government enacts reforms, is seeing some of the best investment opportunities in mortgage lenders and auto makers.

The biggest collapse in crude prices since the 2008 global recession is “God’s gift" to India and its benefits will flow in the next three months, Jhunjhunwala, who owns more than $1 billion of stakes in companies including drug maker Lupin Ltd, said in an interview with Bloomberg TV India on Wednesday. He cited LIC Housing Finance Ltd and Escorts Ltd among his top picks.

The S&P BSE Sensex increased 30% in 2014, the most among the world’s 20 biggest markets after China, as Modi ended controls on diesel prices and allowed more overseas investment in sectors such as defence. Last month, he passed executive orders to make it easier for companies to buy land and to allow more foreign investment in insurance after parliament’s session ended without votes on several key bills.

“This government is determined to do what it thinks is right," Jhunjhunwala said, adding he has “extreme faith and conviction" in the administration.

Brent crude, the international benchmark, fell as low as $50.52 a barrel on Tuesday, the lowest since April 2009. Lower oil prices slowed gains in India’s consumer price index to 4.38% in November, the least since January 2012, because the country imports 80% of its energy needs.

Plummeting commodity prices will keep inflation within 5%, below the central bank’s 6% target for January 2016, Jhunjhunwala said. The Reserve Bank of India (RBI) may cut the main rate by 100 basis points over the next two or three policy meetings, he said. The central bank has left rates steady at 8% since January 2014.

Governor Raghuram Rajan wants to be “doubly sure that there isn’t a situation where he cuts rates and inflation goes up," Jhunjhunwala said.

The Sensex has dropped 6% since the beginning of December as oil’s rout fueled concern the global economy will slow, and as opposition parties derailed plans by the Bharatiya Janata Party (BJP) to pass measures that would permit more foreign investment in insurance and make coal mining more transparent.

Modi issued executive orders to push through the changes, which still need parliamentary approval to come into force permanently. The BJP, which controls 52% of seats in the lower house, holds only 18% of the upper house. Modi needs to find alternative ways to ensure the passage of bills until 2018, when his grouping’s representation is expected to reach a majority.

“We are ourselves underestimating the change that this government is bringing and the effect of that change," Jhunjhunwala said. “Everything in India takes time, nothing can change overnight."

Jhunjhunwala said he’s bullish on some home loan companies and auto makers. Home loans as a percentage of India’s GDP (gross domestic product) are about nine percent versus 17% in China and 69% in the US, data from Housing Development Finance Corp. show.

Dewan Housing Finance Corp., in which Jhunjhunwala held a 3.89% as of 30 September, surged 85% last year, data compiled by Bloomberg show. Dewan and LIC Housing jumped at least 2% at the close today, versus a 0.3% drop in the Sensex. Lupin, whose shares have more than tripled in the three years through December 2014, fell 1.3%.

Jhunjhunwala said the Indian equity market offered enough opportunities across the board over the long run. One stock he is bullish on is tractor maker Escorts, in which he held a 5.47% stake as of 30 September. The stock fell 6.5% last year after surging 84% in 2013.

“If India is going to have the kind of bull market that I envisage, all sectors will do well in time," he said. Bloomberg