You can trade in equity intraday (MIS) but not equity delivery (CNC)
Here is the list of NSE F&O list of approved scrips.
On this this list Haircut signifies the value of holdings which is not given as margin. So if haircut is 40 and you pledge Rs 100 worth of stocks, you get only Rs 60 as margin. When a client takes F&O position, exchanges mandate that 50% of this margin has to compulsorily come through cash and rest can be in terms of collateral margin. If a broker in not asking you for this 50% margin, it means that he is blocking his funds on your behalf. The reason he could be doing this is because his brokerage earning from you is much higher, so whatever the interest cost of funding you is covered in the brokerage being charged to you.
The bigger thing of concern to you should be that if a broker is not following exchange regulation, do you really want to trade with him?