Physical Delivery of Stocks in Options Spreads

With reference to the following article:

https://support.zerodha.com/category/trading-and-markets/margin-leverage-and-product-and-order-types/articles/policy-on-physical-settlement

  1. Is it good to assume that spreads or covered contracts are not affected by Physical Delivery (assuming it is held till expiry)?

Example:
A Butterfly Spread with
SBIN 650 CE Written
SBIN 650 PE Written
SBIN 700 CE Long
SBIN 600 PE Long

  1. Will there be an impact on Margins in the next few days since 31st if the expiry?

No, for any ITM long margin will be blocked from wednesday irrespective of covered leg, for short irrespective of moneyness(ITM/OTM) margin will be blocked.

Double margins will be blocked from wednesday ie last 1 day to expiry. Check this for detailed info on margins.

Thanks. @siva

My question was also on the lines of a “Physical Delivery”. Assuming a covered position is held till expiry, does this mean that no Physical Delivery risk exists since it is a NetOff?

It is not a netoff, if it expires ITM you need to deliver your shares, it comes under physical settlement.