Process for Physical Delivery in F&O

Where I need to keep the margin (Shares/ funds) required for Physical settlement?

You will need to allocate or maintain the funds allocated for the full contract value in case of buy i.e. funds payable contract open positions (like Long future, Long call and Short put) in the F&O allocation. In case of sell positions (like Future sell, Option Call sell and Option Put buy) you will need to keep sufficient free shares in the demat allocation of your linked demat account.