Can the product type of the hedged position be converted?

You can convert the product type of hedged positions (MIS to NRML and vice versa) one leg at a time. However, as soon as you convert the product type of a particular hedged position, the margin benefit of the hedge will no longer be available, and the required margin will increase for the intraday and overnight positions.

Example scenario

1. You have bought Nifty long futures and Nifty short call option contract using MIS (Intraday) product type and received the margin benefit as it's a hedged position.
2. If you convert only one position to NRML (overnight), the margin benefit will no longer be available, and your required margin will increase.
3. However, if you convert both positions to NRML, you will continue to receive margin benefits.