Asking how IIT Indore became good in programming is as lame as asking why Indians are good at cricket. The only reason is that it’s the first thing IIT Indore did big and succeeded.
There are a number of students who started the legacy one of them being Archit Karandikar, an IOI Bronze medal winner. Many followed the footsteps of this genius of them being Sanjeev Shenoy and Gaurav Agarwal who too gained fame in competitive programming. IIT Indore had the honor to even make it to the World Finals. In the World Finals of 2013-14, the trio went to Ekaterinburg and again achieved a milestone.
It was after this that IIT Indore picked pace in competitive programming and then competitive programming and many coding lovers started coming in flocks to IIT Indore CS.
Sadly, the faculties are rarely involved and make no major contributions. It’s the students who are left on their own to give shape to their dreams and talents.