UPDATE 1-Aruba Networks IPO rises 29 pct in market debut

(Updates share price and adds details)

NEW YORK, March 27 (Reuters) - Aruba Networks Inc. stock (ARUN.O) rose as much as 29 percent on Tuesday in its market debut, a day after pricing above its forecasted range.

Shares of the wireless networking hardware maker opened up 27 percent at $14 before climbing to a session high of $14.22 on Nasdaq. Shares were up $2.65, or 24 percent, at $13.64.

On Monday, the Sunnyvale, California-based company raised $88 million with an offering of 8 million shares at $11 a piece compared with a forecasted range of $8 to $10.

The offering price gave the company an initial market capitalization of about $827 million.

Aruba's equipment provides secure access to data, voice and video applications, and links desktop and laptop computers as well as other mobile devices.

Customers include Google Inc. (GOOG.O), Ohio State University, Pu Dong International Airport in Shanghai and the U.S. Air Force, according to an amended filing with the U.S. Securities and Exchange Commission.

The company also sold 388,888 shares to Microsoft Corp. (MSFT.O) in a private placement upon completion of the offering, according to the filing.

Already one of the biggest competitors to industry heavyweight Cisco Systems Inc., (CSCO.O) Aruba joins a growing list of offerings from computer networkifg companies in the last year, including Acme Packet Inc. (APKT.O) and Riverbed Technology Inc. (RVBD.O)

Acme and Riverbed offered shares in October and September, respectively, and posted two of the biggest first-day gains in 2006.

Aruba narrowed losses to $12 million in 2006 from $32.6 million in 2005, while increasing revenue to $72.5 million from $12 million.

The company plans to use net proceeds from the offering, which represents an almost 11 percent stake in the company, for working capital, expansion of its sales and support teams, research and development, and general corporate purposes, according to the filing.

Underwriters, led by Goldman Sachs and Lehman Brothers, have the option to purchase an additional 1.2 million shares to cover overallotments.