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UPDATE 1-Shares of payroll processor Paylocity soar in debut

* Shares open at $31, above IPO price of $17

* Values company at $1.55 bln at day's high

(Add details, analyst comment; updates share movement)

March 19 (Reuters) - Shares of online payroll processor Paylocity Holding Corp rose as much as 80 percent in their market debut as offerings by cloud-based enterprise software companies continue to rule the IPO market.

Paylocity's shares opened at a high of $31, valuing the company at about $1.55 billion. They were up about 53 percent at $25.94 on the Nasdaq at 1150 ET, making the stock the top gainer on the exchange.

The Illinois-based company raised about $120 million after its initial public offering was priced at $17 per share, slightly above the expected pricing range.

Of the 7 million shares on offer, the company sold 5 million, while the rest came from selling stockholders.

Private equity firm Adams Street Partners is one of the large stockholders of the company with a 26 percent stake.

Paylocity provides cloud-based payroll and human resources tools to medium-sized firms and had about 6,850 clients in the United States as of June 30.

"The company has first mover advantage in the area of offering payroll and HR services on the cloud," said Francis Gaskins, a partner at IPO research company IPODesktop.com.

Paylocity, which operates through an extensive referral network, also provides data reporting and analytics services to organizations.

"Category of enterprise software is very much in demand right now," Gaskins said, adding that the company's focus on medium-size businesses makes it attractive to investors.

Paylocity expects to tap the growing demand for digital payroll and manpower management services amid complex business processes and workflows.

The U.S. market for human capital management and payroll outsourcing services is estimated to be $22.5 billion in 2014, the company said, citing a report from market research firm IDC.

Paylocity counts enterprise-focused software providers such as Ultimate Software Group Inc and Workday Inc as well as payroll service providers such as Automatic Data Processing Inc and Paychex Inc among its competitors.

The company said revenue rose 29 percent to $77.3 million for the year ended June 30 while net income fell 64 percent to $617,000.

Shares of companies that provide services through cloud computing such as Workday, ServiceNow Inc, Guidewire Software Inc and Demandware Inc are trading well above their IPO prices.

Last week, cloud-based health information software provider Castlight Health Inc's shares rose more than 160 percent in their market debut, making the listing the strongest by a technology company so far this year.

Deutsche Bank Securities Inc, Merrill Lynch, Pierce, Fenner & Smith Inc and William Blair & Co LLC were the lead underwriters for Paylocity's offering.

(Reporting By Neha Dimri in Bangalore; Editing by Don Sebastian)