Shares of Hindustan Unilever (HUL) fell 4% to Rs 2,540 in intraday trade on the BSE on Friday after the company’s board approved an increase in royalties and technology fees paid to its parent Unilever.

Shares of the fast-moving consumer goods (FMCG) company have fallen 5.5% over the past two sessions.

The company announced on Thursday that it has entered into a new agreement with Unilever, under which the royalty and central services fee will increase to 3.45% of turnover from 2.65% in FY22. This will be done over three years, starting with an effective cost increase of 45 basis points between February 2023 and December 2023.

This is followed by an increase of 25 basis points in the calendar year 2024 (CY24) and 10 basis points in calendar year 25 to 3.45% of turnover, which will remain at the end of calendar year 27. These royalty changes are included in management’s mid-to-long-term EPS growth target announced on its investor day in November 2022.