<p>I have installed m2eclipse plugin from <a href="http://web.archive.org/web/20150524020820/http://m2eclipse.codehaus.org/" rel="nofollow noreferrer">http://m2eclipse.codehaus.org/</a>. Now I want to use that as a standalone build tool but I am unable to find the installation directory. Can anyone help me in this?</p>

I am not sure to understand what you want.
m2eclipse is a
plugin
for Eclipse, thus it must be run inside Eclipse.
To have a standalone build tool, I suggest that you just download directly the
Maven2 binaries files
, and install it on your computer, if it is not already done!
For your information, all plugins are stored in the eclipse-dir/plugins directory, as a subdirectory or as a JAR file.