Hello Mukesh,
Prompting for credentials might be the public folders are still pointed to the old server Exchange server 2003.
Did u tried the Test-OutlookWebservices if yes, what is the result.
Did u get an event ID realted to Autodiscover in the evenviewer -> application logs
Also you can follow the below article
http://blogs.technet.com/b/exchdxb/archive/2012/05/10/troublshooting-autodiscover-exchange-2007-2010.aspx
Please revert back if found any inputs on the above steps and if the issue still persists.
Regards,
Praveen
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