Shares dropped to 10.84 euros ($12.65) at 0738 GMT after initially opening at their issue price of 12 euros per share.
Hensoldt, whose high-tech cameras are used in Tornado fighter jets, priced at the lower end of an offered range of 12-16 euros per share range.
Earlier this week caravan maker Knaus Tabbert, which had also priced at the bottom of the range and cut the number of shares on offer, fell below its offer price when it listed.
Hensoldt, a former Airbus unit which also supplies radar for Eurofighter jets and periscopes for Leopard and Puma tanks, was bought by the private equity company KKR in 2016.
The deal values the company at 2.3 billion euros, including debt, with 38.3 million shares being sold.
KKR was set to hold more than 60% the company after the listing.
(Reporting Tom Sims in Frankfurt and Alexander Huebner in Munich; Editing by Michelle Martin)