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Indian shares held steady on Wednesday after the Reserve Bank of India delivered a smaller interest rate hike as widely expected, while embattled Adani Group shares recouped losses for a second straight day.

The Nifty 50 index was up 0.68% at 17,840, as of 11:30 a.m. IST, while the S&P BSE Sensex rose 0.6% to 60,637.

The central bank raised the key policy repo rate by 25 basis points, in line with economists' expectations, and surprised markets by leaving the door open to more tightening, saying core inflation remained high.

"The RBI's decision will have a neutral impact on the markets, at least two members of the monetary policy committee were against a rate hike, wanted a pause ... That's a positive given the inflation is below the upper level of the RBI's tolerance band," said Neeraj Dewan, director, Quantum Securities

"The stickiness of core or underlying inflation is a matter of concern. We need to see a decisive moderation in inflation," RBI Governor Shaktikanta Das said in his policy address.

A Reuters poll showed the RBI likely raising rates by 25 bps to mark the final increase in its current tightening cycle, bracing for a pause for the rest of the year.

Meanwhile, the majority of Adani Group stocks surged for a second straight day with the flagship Adani Enterprises jumping 13% on Wednesday. The conglomerate saw $104 billion wiped off its market value since the Hindenburg Research report two weeks ago.

Metal stocks added 2.2%, the most among sectoral indexes, mainly led by the surge in Adani Enterprises, while IT stocks were also up 2%, mirroring a rally in tech-heavy Nasdaq index overnight.