How can I explain the gap of one year after class 12 in IPM IIM Indore interview?

Be honest and tell them about the gap year. They will not reject you just because of a gap year. It is not an offense to have one. Most of the time the interviewer won’t be concerned about the gap year. 

If asked, answer honestly. Tell them how having a gap year helped you have better results. You can also talk about the hobbies and skills that you picked up during the gap year. 

However, if you choose to give a fabricated answer, your chances of getting selected will significantly reduce. It is not easy to fool the interviewers and giving an honest answer will be the best.