Posting answer to my own question as I found it here and was hidden in bottom somewhere -
https://social.msdn.microsoft.com/Forums/vstudio/en-US/64baed8c-b00c-40d5-b19a-99b26a11516e/visual-c-redistributable-for-visual-studio-2015-rc-fails-on-windows-server-2012?forum=vssetup
This is because the OS failed to install the required update Windows8.1-KB2999226-x64.msu.
However, you can install it by extracting that update to a folder (e.g. XXXX), and execute following cmdlet. You can find the Windows8.1-KB2999226-x64.msu at below.
C:ProgramDataPackage Cache469A82B09E217DDCF849181A586DF1C97C0C5C85packagesPatchamd64Windows8.1-KB2999226-x64.msu
copy this file to a folder you like, and
Create a folder XXXX in that and execute following commands from Admin command propmt
wusa.exe Windows8.1-KB2999226-x64.msu /extract:XXXX
DISM.exe /Online /Add-Package /PackagePath:XXXXWindows8.1-KB2999226-x64.cab
vc_redist.x64.exe /repair
(last command need not be run. Just execute vc_redist.x64.exe once again)
this worked for me.
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