One97 Communications Ltd, the parent of payments services provider Paytm, is in talks with five lenders to help employees borrow money to exercise their stock options before the company’s much-awaited initial public offering (IPO), two people aware of the discussions said.

Paytm wants to help employees pay for buying their vested options and make tax payments if required, the people said, requesting anonymity.

Stock options are taxed as a prerequisite when the employee exercises the option to buy the stocks. The exercise price is the amount the employee pays to buy the vested options.

The difference between the fair market value of the shares on the date of exercising the options and the amount paid to exercise the option is taxed based on the salary bracket slab of the employee.

In addition, employees may have to pay capital gains tax if they choose to sell their shares.