"if i visit the redirect address on my browser it installs the on demand client but it does not redirect automatically"
If I am understanding this correctly, you are able to get the on-demand client to install if you type in the IP address of the internal interface into the browser's address bar, but you are not automatically taken there if you, say, enter in "google.com" in the browser's address bar.
Try entering in "http://localhost" into the redirect field in the SEPM under Admin > Servers > Enforcer group properties > Authentication
If that does not work, then it could be that your proxy is getting in the way. Try bypassing your proxy as a test.