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I found a solution so thought of posting it here.
I made 2 changes:
1. On the windows firewall ( of VM) added port 80 to exception (both TCP & UDP).
2. on the server_root\htdocs\mainfile.php(43):
define('XOOPS_URL', 'http://localhost/xoops-root/htdocs');
change the reference of "localhost" to your server(or machine) name
define('XOOPS_URL', 'http://your_server_name/xoops-root/htdocs');
There may be other solution, but the above worked for me.
Deepak