Margin received from pledged stock can only be used for futures trading, option writing and equity intraday margin trades. If you want to buy equity for holding, then this is a cash trade and the entire cash requires to be there in the trading account.
You will be able to use this entire margin after haircut for taking intraday or overnight positions in Futures, and for writing Options of equities, indices, and currencies. You will not be able to use this margin to buy Options or take further positions on the equity segment.
Exchanges stipulate that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin.