UPDATE 2-HomeAway shares surge in market debut

* Shares up as much as 52 pct

* Priced IPO at top of range (Adds background on company, underwriters; Updates share)

June 29 (Reuters) - Shares of vacation rental website HomeAway Inc rose more than a half on their market debut, as investors continue to be drawn to the slew of Internet companies that have gone public recently.

On Tuesday, HomeAway priced its initial public offering of eight million shares at $27 apiece -- the top end of its previously announced range -- raising $216 million.

The company offers fully furnished, privately owned homes, condominiums, villas and cabins that can be rented on a nightly, weekly or monthly basis.

Austin, Texas-based HomeAway was founded in 2005 and has more than 560,000 paid vacation rental home listings in more than 145 countries, according to its website.

HomeAway, which competes with companies like TripAdvisor and Wyndham Worldwide , has been posting losses over the past few years.

The company, which counts Austin Ventures and Redpoint Ventures among its owners, said it would use the proceeds from the offering to redeem shares of preferred stock, issue dividends and for corporate purposes.

Morgan Stanley & Co, Deutsche Bank Securities, Goldman Sachs & Co and J.P. Morgan Securities are among the underwriters for the IPO.

Shares of the company were trading up 48 percent at $39.87 in late morning trade on Nasdaq. They had surged to $41 earlier in the session. (Reporting by Tanya Agrawal in Bangalore; Editing by Joyjeet Das)