Margin collateral query

[VaradJoshi]

Bear with me, there are 4 short questions. Any help will be highly appreciated.

If I pledge a stipulated liquid fund as collateral for margin then:

1. Would I continue to earn returns on this investment if I pledge the fund as a collateral?

2. If I do continue to earn returns, then would these returns be accounted while providing margin in the future i.e. if on an investment of Rs 100,000 I earn 10% return through the fund, would the margin I receive then be Rs 110,000 - 10% haircut = Rs 99000?

3. Also, can I pledge the liquid funds mentioned in ETFs and Mutual Funds in this sheet by Zerodha as collaterals for margin? https://docs.google.com/spreadsheets/d/1vRI4NKpJ-3mnOWxUhSRMSQD5txy8QNumzSQrdfGKyL0/edit#gid=15947263

4. Will I be required to keep 50% of the margin in an FnO trade in cash if I pledge these liquid funds?

[ShubhS9]

@VaradJoshi

Would I continue to earn returns on this investment if I pledge the fund as a collateral?

Yes, you continue to earn returns on your pledged securities.

@VaradJoshi

If I do continue to earn returns, then would these returns be accounted while providing margin in the future i.e. if on an investment of Rs 100,000 I earn 10% return through the fund, would the margin I receive then be Rs 110,000 - 10% haircut = Rs 99000?

Margin has already been alloted to you, so I don’t think this can be done. You can unpledge and repledge the shares if you want extra margin on those shares.

@VaradJoshi

Also, can I pledge the liquid funds mentioned in ETFs and Mutual Funds in this sheet by Zerodha as collaterals for margin?

Yes you can pledge any security mentioned in that list.

@VaradJoshi

Will I be required to keep 50% of the margin in an FnO trade in cash if I pledge these liquid funds?

Liquid ETF’s and Liquid MF’s are considered as cash equivalent.

[VaradJoshi]

Thank you for the response